How Financial Institutions Can Fight Against Elder Abuse and Financial Exploitation
Published on June 6, 2024
AUTHOR
Eric Wester, AAP, APRP, NCP
Associate Director of Education Services
World Elder Abuse Awareness Day (WEAAD) is held annually on June 15th to provide an opportunity for communities around the world to promote a better understanding of the abuse and neglect of older people. This is achieved by raising awareness of the cultural, social, economic, and demographic processes affecting elder abuse and neglect. While we set aside one day per year as a global community to recognize the harm of elder abuse, this tragic exploitation occurs around the world every day. Organizations providing financial services, such as financial institutions and wealth management firms, are often best positioned to help identify, report, and stop the abuse of elders and other vulnerable people in our communities.
What is considered 'financial abuse' of elders?
The Consumer Financial Protection Bureau (off-site) defines financial abuse as “when someone takes or misuses another person’s money or property for the benefit of someone other than that person. For example, neighbors, caregivers, professionals, and even family or friends may take money without permission, fail to repay money they owe, charge too much for services, or not do what they were paid to do. Financial abuse—sometimes called financial exploitation—is a form of elder abuse.”
The University of Minnesota (off-site) reports that “It is widely agreed that one of the most prevalent and growing types of elder abuse is family financial exploitation. Elder Family Financial Exploitation is part of a larger emerging elder justice crises with unmeasured costs and consequences for older adults, their families, and society.”
Monitoring for signs of potential elder abuse and financial exploitation
While no two elder abuse and financial exploitation cases will likely be identical, there are warning signs that financial institutions can watch for that may be indicative of abuse or financial exploitation. Financial institutions should watch out for the following red flags:
- Large, frequent, unexplained withdrawals or other usual activity in an older adult’s deposit accounts, including ATM withdrawals or debit card transactions being made by someone who has never used a debit card.
- Closing or withdrawing funds from term deposits, such as Certificates of Deposit, without regard to early withdrawal penalties. This may also be coupled with attempts to send large sums of money via wire transfer that don’t align with the historical activity of this person.
- Checks clearing that contain memo lines indicating checks are payable for “gifts” or “loans” to other individuals, which may include checks payable to “new friends” who may also periodically accompany the individual into a branch location.
- Checking and/or savings account statements being sent to an address other than where the person lives, or switching from paper to electronic statements when the older adult does not typically use online banking services.
- Caretakers, relatives, or friends conducting transactions on behalf of the older adult, which may include issuing checks with questionable signatures or outright forgeries.
According to the Minnesota Elder Justice Center (off-site), financial exploitation can occur in various ways. This includes situations where someone with a legal obligation to manage a vulnerable adult’s money makes unauthorized expenditures or fails to use the funds for essential needs such as food, clothing, shelter, health care, or supervision. Additionally, financial exploitation can happen when someone uses or disposes of a vulnerable adult’s money or property without legal authority.
Reporting elder financial exploitation
There were 155,415 Suspicious Activity Reports ("BSA reports") filed between June 15, 2022, and June 15, 2023, indicating roughly $27 billion in Elder Financial Exploitation-related suspicious activity. Between June 15, 2023, and January 15, 2024, FinCEN has continued to receive an average of 15,993 reports per month. “FinCEN has long recognized the threat that Elder Financial Exploitation poses and the need to protect the older adult population from financial abuse,” said FinCEN Director Andrea Gacki.
In addition to filing a Suspicious Activity Report, FinCEN recommends that financial institutions refer clients who may be victims of Elder Financial Exploitation to the Department of Justice’s National Elder Fraud Hotline at 833-FRAUD-11 or 833-372-8311 for assistance with reporting suspected fraud to the appropriate government agencies.
The Consumer Financial Protection Bureau (off-site) also suggests the following reporting options:
- If you suspect elder financial abuse, report it to Adult Protective Services (APS). APS are social services programs in each state. They serve older adults and adults with disabilities who need help due to abuse, neglect, or exploitation. Adult Protective Services is a common term, but this may not be the name of the agency in your state. Find your local APS (off-site).
- If there is an urgent risk of harm to someone, you should call 911 right away. Otherwise, you can call the non-emergency number for your local police or Sheriff’s office to file a report.
- You can also report financial abuse to your local District Attorney’s office and ask them to prosecute the person who took advantage of the victim.
Resources for financial institutions
The Consumer Financial Protection Bureau provides several resources for financial institutions, including sample communications, social media posts, handouts, and other reports and documents. Click here (off-site) to view and download these resources.
Elder Financial Exploitation Symposium
UMACHA is proud to partner again with FRPA to host its annual Elder Financial Exploitation Symposium, featuring a distinguished panel of industry experts, to continue the discussion about financial abuse and exploitation of elders and vulnerable adults.
Join us on Thursday, June 27, 2024, from 8:30 am – 4:00 pm CT.
Learn more about the event or register to attend today!
Remember you can always reach out to our Member Hotline by sending an email to info@umacha.org or giving us a call at (763) 549-7000. There’s nothing we love more than diving into a question or issue and helping bring clarity by providing guidance.
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