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Consumer Confidential: Banks should do more to protect seniors from 'grandparent scam'

David Lazarus, Los Angeles Times on

Published in Business News

It's time for businesses to stop wringing their hands over the aggressiveness and cleverness of scammers, and to be much more assertive in protecting people from fraud -- especially seniors.

I say this after speaking with Montrose, Calif., resident Sal Macaione, 79, who fell victim the other day to what's known as the "grandparent scam." If you're unfamiliar with this particularly ugly racket, I'll run down the details in a moment.

What really sizzled my bacon here is Macaione's bank -- Banc of California -- being little more than a bystander as the fraud unfolded.

What I mean by that is when Macaione showed up at the Pasadena branch to wire $27,000 to the scammers, he says the teller barely batted an eye at a questionable transaction that would wipe out nearly two-thirds of Macaione's savings account.

"He asked what the transfer was for," Macaione recalled. "I told him it was personal."

And that was that. The money disappeared, never to be seen again.

 

Kathy Stokes, director of fraud prevention programs for AARP, said, "Banks are in a difficult position" because, by law, they're required to fulfill an adult customer's transaction request.

At the same time, she said, financial institutions can and should do more to intervene when fraud is suspected.

"We believe a lot of these types of scams can be stopped in their tracks," Stokes said. "Anyone in a position to be an intermediary should be stepping up."

There are many areas where businesses could be doing more to protect customers.

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