Howard Tischler’s mother didn’t want to burden her children, so the former accountant arranged her finances for retirement and maintained an independent lifestyle.

As she aged, Tischler noticed inconsistencies in her finances — credit card charges that made no sense, for example, and bills for an auto parts service even though she had no car or driver’s license. It didn't help that she was legally blind.

“I didn’t see any signs of dementia, it wasn’t something that was visible,” Tischler says. “Other people were calling and selling her things. She brought in a friend to help pay her bills, and the friend was writing herself checks out of my mother’s bank account.”

Her problems were mounting, but the nature of the exploitation made it difficult for financial institutions to detect. His mother stopped paying for a long-term care policy she had purchased. Then, when her expenses snowballed, she started to take early withdrawals out of an annuity to cover.

“If we stepped back and looked at it, there were a lot of indicators of a problem, but they weren’t all within one institution or account,” Tischler says. “It would be difficult for any one person to see what was happening and flag it.”

Tischler, a financial technology entrepreneur, didn’t let the issue go — he founded EverSafe, a Columbia, Md. firm that offers digital account monitoring to help safeguard senior citizens vulnerable to fraud and exploitation.

EverSafe addresses a growing issue: the U.S. Census Bureau expects the population of people ages 65 and up to double by 2050, and cognitive decline often begins for people in their late 50’s.

The 2010 Investor Protection Trust Elder Fraud study found that one in five Americans over the age of 65 has been the victim of a financial fraud. Additional research from that year by the National Institute on Aging found that victims of elder abuse had a one-year mortality rate, or more than twice that of individuals of similar age and health who had not been mistreated. Furthermore, a 2011 study by MetLife found that elder financial exploitation costs seniors more than $2.9 billion annually.

“The truth is that this just kills people,” says Elizabeth Loewy, EverSafe general counsel and vice president of industry relations. “It’s a heartbreaking problem, but I believe that this problem will be resolved in a number of years through the use of technology.”

Tischler and Loewy aren’t the only ones combatting elder abuse. As states consider laws to help protect vulnerable citizens, another initiative is combatting elder financial abuse through education.

The North American Securities Administrator’s Association announced a program to help train financial professionals in reporting suspected elder exploitation. The training, called Senior$afe, will roll out to NASAA members in April and will include training, visual aids and a guide to red flags of elder financial abuse.

NASAA’s initiative was inspired by a similar program from the Maine Council for Elder Abuse Prevention created for bank and credit union tellers.

“Recognizing the signs of cognitive decline and financial exploitation is critical if we are to protect elderly and vulnerable investors,” said Judith Shaw, NASAA president and the Maine Securities Administrator. “Financial professionals are uniquely positioned to identify red flags of fraud and abuse. We can all work together to provide a solution.”

NASAA’s new training program is just part of an ongoing senior initiative that includes a model act designed to protect vulnerable adults from exploitation and a new website, ServeOurSeniors.org, dedicated to senior-focused resources.

Loewy gave kudos to NASAA’s efforts, acknowledging that the financial services industry has made great strides in addressing the issue of elder exploitation, but also arguing that can’t be expected to solve the problem on its own.

“They’re working on their own algorithms to capture abuse and exploitation, and they’re focusing more on seniors,” Loewy says. “I think it’s asking a lot to have them focus on just one group of victims, and they’re hamstrung because they can’t share information across accounts and they can’t ask for credit reports. That may be a reason that some firms, like Fidelity, are interested in what we’re doing.”

Red Flags

According to the National Institute on Aging, the most common red flag of financial exploitation is unusual account activity. But many financial professionals and other watchdogs aren’t looking across all of a client’s accounts. That’s where EverSafe come in.

“We start by monitoring financial transactions – credit card, bank, investment, credit report – that serves as the basis for identifying suspicious activity we identify activity,” Tischler says. “We’ve developed algorithms based on what happens to an aging population. We look at an individual’s historical transactions, and we report things that are specifically out of the ordinary given their past behavior.”

EverSafe also monitors clients’ credit reports, and sends out alerts when unusual transactions occur.

“Money is being taken a little bit at a time across accounts,” Loewy says. “These exploiters are smart and sophisticated.”

Clients can establish one or more trusted advocate who is alerted to suspicious activity.

“These would be people in their inner circle who they would want to look after them,” Tischler says,. “The senior can decide how much or how little information their trusted advocates should be able to see. When alerts occur, the senior or the advocates can update us to say that everything is okay, or red flag the activity.”

So far, the software has generated more than 60 alerts in a little over a year, Loewy says.

The protection software was developed in conjunction with financial, law enforcement, health and non-profit leaders.