I sympathize with every victim of this type of scam. It could be our parents, our grandparents, or maybe one day it could even be me. But I always wonder: how much control do we want to give the banks over our money? And how much responsibility should we take – or let someone we trust take – to prevent these kinds of things from happening?
It will happen again tomorrow, and the next day, and the next day.
What happened to Nina Mortellito
This is evident from a lawsuit that has been filed Manhattan Supreme CourtNina Mortellito is an 86-year-old Upper East Side resident who suffers from age-related memory loss. Between August 2023 and May 2024, scammers withdrew nearly $700,000 from her accounts at three different banks.
It started with a pop-up alert on her computer claiming her bank accounts had been hacked. The scammers convinced her that the only way to protect her money was to convert it all into gold bullion.
More than nine months, according to that Yahoo Finance reports on the caseshe:
- About withdrawn $275,000 from its Merrill Lynch accounts
- Wired $150,000 from TD Bank to a gold dealer in Texas
- Emailed one A check for $30,000 towards the scammers
- Took more than $100,000 from her UBS accounts
9 monthsDuration of the scam
3 benchesIt was not possible to intervene
The red flags that the banks missed
This is what makes this thing so annoying. According to the court case:
That is the crux of the lawsuit. Lawyer Robert Georges from Georges & Buza PC connect stated: “Banks must take reasonable steps to protect their customers, especially the elderly, who are particularly vulnerable to online scammers.”
Her cousin, Stephen Kuhn, said: “We are extremely disappointed that the banks have not acted according to reasonable professional standards… We have no choice but to file this lawsuit, which we hope will bring real change to the banks’ policies and procedures.”
This is a $28 billion problem
Nina Mortellito is one of millions of older Americans targeted by financial scams every year. The numbers are staggering:
- The FBI data for 2024 shows that older Americans are lost $4.9 billion to fraud – an increase of 43% compared to 2023
- Researchers estimate the true annual costs of the financial exploitation of the elderly $28.3 billion when unreported cases are included
- Financial institutions submitted 155,415 suspicious activity reports related to elder exploitation in one year
And in December 2024, the CFPB, the Treasury Department, and FinCEN published a joint interinstitutional declaration urging banks to do more to protect older customers. The agencies called for better coordination between financial institutions, law enforcement and adult protection services.
The difficult question
This story raises a question that no one has a clear answer to: who is responsible?
How much control do we want to give the banks over our money? And how much responsibility should we take for ourselves – or let someone we trust watch over us?–Steve Rhode
On the one hand, it’s your money. You should have access to it. Banks should not be paternalistic gatekeepers who question every withdrawal.
On the other hand, when an 86-year-old woman who has never withdrawn more than $5,000 suddenly starts making trades over $50,000 — and she has a co-manager on the account specifically because of cognitive issues — that should trigger something. A phone call. A break. A notice to the co-trustee.
The case for bank intervention
- Banks have fraud detection systems specifically for unusual activities
- There was a co-trustee on the account for exactly this reason
- 30+ years of consistent behavior suddenly changed
- Federal agencies are calling on banks to do more
The counterargument
- Account holders have the right to access their money
- Where does protection end and control begin?
- Banks cannot verify the reason for each withdrawal
- Scammers teach victims what to say to bank employees
What you can do to protect your family
If you have elderly parents or grandparents, I would suggest the following based on what this case teaches us:
- Add a trusted contact on their financial accounts – most brokers and banks now allow this FINRA Rule 4512
- Set up transaction alerts so that someone is notified when major withdrawals occur
- Talk openly about scams– mainly pop-up alerts, phone calls claiming their accounts have been compromised, and gold/crypto conversion sites
- Consider a power of attorney if cognitive decline is a problem, before a crisis imposes the problem
- Report suspected exploitation Unpleasant FBI IC3 and your local adult protective services
Key Takeaways
- Nina Mortellito, 86, lost nearly $700,000 in a scam that convinced her to convert her savings into gold bullion
- Three banks – Merrill Lynch, TD Bank and UBS – processed dramatic, anomalous transactions without intervention
- She sues all three for negligence, arguing that they failed in their duty to protect a vulnerable customer
- Losses from elder fraud will reach $4.9 billion by 2024, and the actual cost could reach $28.3 billion annually
- Add trusted contacts and set alerts for older family members’ accounts now, before it’s too late
Frequently asked questions
Can banks be held liable for elderly fraud?
It depends on the circumstances and jurisdiction. The lawsuit against Merrill Lynch, TD Bank and UBS claims negligence – that the banks failed to take reasonable steps to protect a vulnerable elderly customer when red flags were clearly present, such as dramatically unusual withdrawal patterns and a co-trustee arrangement.
How common is financial fraud among the elderly?
It is widespread and growing. The The FBI reported this $4.9 billion in losses from elder fraud by 2024, an increase of 43% from the previous year. Researchers estimate the true annual costs $28.3 billion when unreported cases are included.
What is a trusted contact on a financial account?
A trusted contact is someone a financial institution can contact if it suspects exploitation or has concerns about an account holder’s mental capabilities. Below FINRA Rule 4512brokerage firms are obliged to request trusted contact details. This person does not have access to the account, but can be notified of suspicious activity.
What should I do if I suspect financial exploitation of the elderly?
Report it to your local immediately Adult Protective Servicesthe IC3 of the FBIand the financial institution involved. If exploitation is ongoing, contact local police. Time is of the essence: banks can sometimes freeze or recover funds if they are notified quickly.
(Source: East Side Feed | Yahoo Finance/Moneywise)
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