Preventing Financial Exploitation of Elders

Preventing Financial Exploitation of Elders

Presented by Laura Nelson, AAP NCP Education Specialist/Auditor

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Audio

Presented by:

PAR/WACHA-The Premier Payments Resource Laura Nelson, AAP, NCP

Education Specialist / Auditor 262-345-1245 or 800-453-1843

www.wacha.org lnelson@wacha.org

2017

Preventing Financial Exploitation of Elders

�  This material is not intended to provide any warranties or legal advice, and is intended for educational purposes only.

�  This document could include technical inaccuracies or typographical errors and individual users are responsible for verifying any information contained herein.

�  The information in this document and discussed during this presentation is the exclusive property of PAR/WACHA. It may not be copied, disclosed, or distributed, in whole or in part, without the express written permission of PAR/WACHA.

�  © 2017 PAR/WACHA All rights reserved

Disclaimer

Elder Financial Exploitation

Financial Exploitation means: “The use of an older person's resources by another to the disadvantage of the older person and/or the profit or advantage of a person other than the older person”

� The National Adult Protective Services Association defines elder financial abuse as the “illegal or improper use of an older person’s or vulnerable adult’s funds, property, or assets”

Definition

Unauthorized use of an individual's personal identifying information or documents

What is Identity Theft

�  There are an estimated 6 million victims of Elder Abuse annually in the U.S. or 1 in 8 Americans age 65 and older.

�  In fiscal year 2015 in Boston 24,978 elder abuse reports were received and there were 7,117 newly confirmed allegations of elder abuse.

� An increase of 37% of total number of cases and a 57% increase from 2011.

� Number of cases per month in 2015 was 2,079.

Elder Abuse Facts

� Types of cases � Strangers – 51%

�  Home repairs �  Phone scams �  Robbery

� Family, friends , neighbors -34% � Business -12%

�  Insurance, attorneys, contractors

� Medicare and Medical fraud – 4%

Statistics- 2016

� Total dollars reported in Millions � Medicare and Medical Fraud � $306.1

� Business � $205.2

� Family, friend neighbor � $11.5

� Strangers � $7.6

Stats - continued

� Women more vulnerable � Age 80-89 and lived alone and needed assistance with

health care or home maintenance � Perpetrator

� Most were men who ranged from 30 to 60.

Profiles/Victims

�  To report abuse of an elder age (60 and over) in Wisconsin contact your county’s helpline.

�  To report abuse of an elder age (60 and over) outside the state of Wisconsin, contact National Adult Protective Services Association at (217) 523-4431.

�  To report abuse in a nursing home or long term care facility contact Wisconsin Division of Quality Assurance at 1-800-642-6552.

Elder Abuse Reports

0.0%

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25.0%

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Elders are fastest-growing segment of our population

�  Fastest growing age group and have accumulated assets �  Investors aged 50 and older control more than 70% of the wealth �  Higher household wealth

�  Don’t realize the value of their assets �  Retirement savings

�  Trusting and polite, Elders are often known as “the Handshake Generation”

� Perceived as “easy targets” � Disabilities

�  Alzheimer’s disease or other dementia �  Dependent on “helpers” �  Less likely to take action against their abusers

�  Technology �  Elders do not understand

Why Elders are Victims

� When a person of trust takes advantage of vulnerable elder to gain control of their money, property or their life - either directly, or through a POA, a trust, marriage, adoption or inheritance

Undue Influence

� By isolating the elder from contact with other family members, friends, and society

� By controlling the elder’s mail, phone calls, visitors, and outings

� By falsely promising the elder to take care of them for the rest of their life

� By falsely worrying the elder with the fear that they will lose their house and be placed in a nursing home

� By lying to the elder that no one else cares about them except the abuser

� By manipulating or withholding the elder’s food or medication so they become weak and compliant

� By threatening the elder with harm, neglect, or abandonment if they don’t agree to do what they are told

Undue Influence Accomplished

�  Fear of loss of independence (e.g. nursing home placement, guardianship, loss of care giver)

�  Feelings of shame and embarrassment � Denial � Perpetrator is a dependent of the victim � Doesn’t want to get a family member or neighbor into trouble � Unaware of theft

�  Memory loss �  Mail diverted

Denial by the Elder

� Misuse of Powers of Attorney �  Taking money from elder bank accounts

�  Stolen checks, ATM card or credit card � Opening new credit cards in elders name

� Refusing to return borrowed money or property �  Transfer of Real Estate Title - Quitclaim deeds � Mortgage Foreclosure Rescue Scams �  Failure to provide promised services

� Car repair � Home improvement scams � Nursing care

Typical Financial Exploitation Scenarios

�  Financial product frauds �  Bogus or inappropriate investments �  Creating or changing living trusts or wills for the benefit of the abuser �  Bank Examiner Fraud scheme

�  Theft of personal property such as jewelry and antiques �  Sweepstakes/You have won a prize �  Telemarketing /Mail Fraud �  Fake Accident � Computer scams: Nigerian fraud & phishing �  Identity theft

Typical Financial Exploitation Scenarios

�  Family members �  Substance abuse, gambling or financial problems �  Feel entitled - ”rightfully theirs” �  Sibling disagreements

� Predators/Con Artist �  Sweetheart scams

�  Seek employment (care givers, repair contractors etc) �  Move from community to community

Perpetrators of Elder Financial Exploitation

� Unscrupulous professionals �  Caregivers �  Professionals hired by the elder

�  Investment counselors/CPA’s �  Lawyers

�  Financial institution employees

� Overcharge � Unfair business practices � Use their position to gain compliance

Perpetrators of Elder Financial Exploitation

�  Employees at FIs are in the perfect position to spot possible financial abuse of the elderly

� Can be instrumental in preventing such fraud

Financial Institutions Can Help

�  Train employees about financial exploitation so they can recognize and take action

� Designate staff person whom employees must notify when they suspect

� Develop protocol for reporting �  Internal, Law Enforcement and Adult Protective services

�  Educate Customers/Members �  Protect themselves from becoming victims

Financial Institutions Can Help

�  IDENTIFY those at risk � PROTECT your customers/members from fraud and take

necessary action

�  Implement policies and procedures to protect your customer

� RESPOND to all concerns and suspicions regarding financial exploitation adult at risk

� REPORT all suspicions – let county elder abuse or law enforcement investigate

The Financial Institution’s Role

� Numerous new withdrawals or large withdrawals, often in round numbers (i.e. $50, $1,000, $5,000, etc.) when such withdrawals are inconsistent with the customer’s banking practices

� Withdrawals made from savings or CDs, despite penalty assessments

�  Elder customer mentions a reason for the transaction that doesn’t make sense, or that sounds suspicious

Red Flags

� Uncharacteristic NSF activity � Uncharacteristic wire transfers � Uncharacteristic ATM activity

Red Flags

� New authorized signers on accounts �  Signature on checks look different/forged

�  Out of sync check numbers (stolen checks)

� Unexplained changes to the Powers of Attorney/Beneficiaries/Trusts

� Changes in property titles, quitclaim deed or mortgage � Unpaid bills

Red Flags

�  There is a new person very involved in the elder’s life with no logical reason for being there, such as a new boyfriend or girlfriend, or a new “best friend” �  The new person is often much younger than the elder

�  There are changes in the elder’s appearance or behavior �  Examples may be that the elder is unkempt, has lost weight, seems

confused, withdrawn, frightened or is slow to respond or appears heavily medicated

� A relative or caregiver who seems overly controlling while accompanying the elder

Red Flags

� Ask questions about the suspicious transaction to understand the reason for it �  Respect confidentiality

� Assess whether the customer understands the proposed transaction

�  Suggest a cashier’s check � Warn of danger of carrying large amount of cash �  Suggest a POD account �  Suggest direct deposit/automatic bill pay �  Suggest a “protected account”

�  A flagged account that is watched more closely

General Guidelines

� Who makes decisions about your finances?

� Who handles your finances? How were your finances handled a year ago? Two years ago?

� Do you know how much money is/are in your bank account(s)?

If the older adult can answer questions,

consider asking:

� Have your spending patterns changed? � Have you created or changed an existing

power of attorney? Trust? Other accounts? � Has anyone asked you to sign something you

did not understand? Did not want to sign? � Do you have any concerns about your

finances?

If the older adult can answer questions,

consider asking:

� Look for signs of confusion or fear � Try to separate the elder from the predator � If you are still suspicious, contact your supervisor � Contact security or law enforcement � Get evidence

� Surveillance proof to prove who accompanied the elder

� Description of suspicious person

General Guidelines

� Early intervention can result in loss prevention for your elder customer/member and your financial institution

� When in doubt, report suspected financial elder exploitation to county elder adult-at-risk agency or your local law enforcement agency

�  The law is on your side and it is the right thing to do!

Help the Elder

� PROBLEM: �  Financial institution personnel observe signs that an older

account holder may be the victim of financial abuse, but may be unsure whether federal privacy laws permit them to share their suspicions with government agencies.

Reportable Elder Financial Exploitation

Reportable Elder Financial Exploitation � Consumer Financial Protection Bureau and seven other

agencies issued a guidance to FIs

�  “…should not hesitate to disclose a customer’s personal information if fraud or other illegal activity is suspected”

�  “ Various federal and state authorities either require or encourage reporting of this type of information to the appropriate agency. This guidance clarifies that reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not, in general, violate the privacy provisions of the GLBA or its implementing regulations.”

�  http://files.consumerfinance.gov/f/201309_cfpb_elder-abuse-guidance.pdf

�  Federal regulatory agencies agree that reporting suspected elder financial abuse is NOT in violation of the privacy provisions of the Gramm-Leach-Bliley Act �  “Any financial institution that makes a disclosure of any possible

violation of law or regulation or a disclosure pursuant to this subsection or any other authority, and any director, officer, employee, or agent of such institution, shall not be liable to any person under any law or regulation of the United States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the person involved in the transaction or any other person of such disclosure.” 31 U.S.C. Sec. 5318 (g) (3).

Federal Privacy Exceptions and Immunities - Gramm-Leach-Bliley Act

�  Some states* have specific penalties for Elder Abuse �  California �  Connecticut �  Indiana �  Florida �  Missouri �  Nevada �  Illinois �  Alabama �  North Carolina * this may not be an all inclusive list

State Laws

Reportable Types of Elder Financial Exploitation

� Obtaining an individual’s money or property by deceiving or enticing the individual, or by forcing, compelling, or coercing the individual to give, sell at less than fair market value, or in other ways convey money or property against his or her will without his or her informed consent;

� The substantial failure or neglect of a fiscal agent to fulfill his or her responsibilities

� Unauthorized use of an individual’s personal identifying information or documents

�  Suspicion, not proof, is adequate! �  It is the job of the Adult Protective Services, District Attorney’s Office

and local law enforcement to act

Remember…….

�  Financial Institutions are the first line of defense in spotting Elder Financial Exploitation and Elder Identity Theft

� Can help victims navigate the steps necessary to stop the fraud and repair the damage

�  Law enforcement officials can help victims feel comfortable filing a police report

� Government agencies such as the FTC can help victims file an official complaint

What Can Be Done?

� Find the enforcement agency in your area � Use the National Elder Care Locator to find Adult Protective Services in your community, anywhere in the US. Just enter your zip code in the locator, or call 800-677-1116

http://www.eldercare.gov/Eldercare.NET/Public/Index.aspx

What Can Be Done?

� Advisory issued February 22, 2011/31 CFR Chapter X � FinCEN’s “The SAR Activity Review” / May 2013 � If a financial institution knows, suspects, or has reason

to suspect that a transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction, the financial institution should then file a Suspicious Activity Report

Suspicious Activity Report (SAR)

� Watch for Red Flags � Evaluate and analyze the indicators and suspicious activity �  Select the appropriate characterization of suspicious activity

in the Suspicious Activity Information section of the SAR form �  Include the term "elder financial exploitation" in the narrative

portion of all relevant SARs filed �  Should also include an explanation of why the institution

knows, suspects, or has reason to suspect that the activity is suspicious

�  The potential victim of elder financial exploitation should not be reported as the subject of the SAR � Rather, all available information on the victim should be

included in the narrative portion of the SAR

Suspicious Activity Report (SAR)

If the elder is being defrauded, he/she will eventually thank you for your help

They Will Thank You

� A long time elderly customer of your financial institution, Mr. Silver, comes to a teller station unaccompanied. He requests assistance in withdrawing $9,000.00 in cash from his money market account of $11,000.00.

� When you ask Mr. Silver why he is withdrawing such a large sum of money, he explains that he has recently won the lottery and has to pay taxes in order for his winnings to be sent to him

Mr. Silver

� Ask Mr. Silver if you could put the money in his checking account and then he could make out a check for this payment?

�  You may want to comment that it is a large sum of cash and that you personally would not want to carry cash

� Explain some of the schemes that are currently taking place � Explain to Mr. Silver that because this is such a large amount

you need to contact a supervisor for approval �  If he insists on cash ask him where he is to deliver the funds as

someone may be standing outside waiting �  In this case you may want to contact Law Enforcement

What should you do?

� An elderly customer, Mrs. Gold seems worried and confused. She is making a large cash withdrawal for $1,500 for a repair on her house

Mrs. Gold

� You could respond: � We can help you with this transaction but the withdrawal is

above my limit �  Contact a supervisor

� How are you today Mrs. Gold? � Aren’t repairs costly, I know I just had to get my plumbing

fixed what are you having repaired? �  I always pay a contractor with a check because that way

I have a record of it and encourage her to write a check � Ask them if the repair has been done to their satisfaction? � Ask them if the repairman is waiting at the financial

institution or her house � You may want to contact Law Enforcement

What should you do?

� An elderly gentleman, Mr. Rich enters the branch assisted by a middle-aged woman

� Mr. Rich asks the customer service representative how he can make his friend “Samantha” a signatory on his accounts

� While completing the paperwork, Mr. Rich appears somewhat hesitant and confused, and often looks to Samantha for advice

Mr. Rich

� You may want to ask Mr. Rich who Samantha is and how they met?

� You may want to ask about his family? �  Separate the elder from suspected perpetrator for interview � Notify supervisor

What should you do?

�  Elder Financial Exploitation can rob a senior of self-esteem and trust as well as his or her means of subsistence

� Although financial exploitation doesn’t leave physical scars, it is a serious and shameful crime

�  Financial Institutions are uniquely placed to identify when customers are possible victims to financial exploitation

Overview

� User-friendly “how-to” guides for four types of fiduciaries: � agents under powers of attorney � guardians �  trustees � Social Security representative payees and VA fiduciaries

� National guides available for download http://www.consumerfinance.gov/older-americans/

� Upcoming: state-specific guides for six states: AZ, FL, GA, IL, OR, VA; and a replication manual for other states

Managing Someone Else’s Money

�  Materials for trainers to provide presentations on preventing, recognizing, and reporting elder financial exploitation

�  Materials for participants include: �  Examples and activities �  Glossary of terms �  Resources and information on managing money and

reporting financial exploitation

�  To download the Money Smart for Older Americans module, or find upcoming train-the-trainer events, go to �  www.fdic.gov/moneysmart

�  To order the Participant/Resource Guide, go to �  www.promotions.usa.gov/cfpbpubs.html

Money Smart for Older Adults

June 15, 2018

Designated by the United Nations

World Elder Abuse Awareness Day

�  National Elder Care Locator to find Adult Protective Services �  call 800-677-1116 �  http://www.eldercare.gov/Eldercare.NET/Public/Index.aspx

�  The National Committee for the Prevention of Elder Abuse (NCPEA) �  http://www.preventelderabuse.org/elderabuse/fin_abuse.html

�  The National Adult Protective Services Association (NAPSA) �  http://www.apsnetwork.org/

�  AARP �  http://www.aarp.org

�  ID Theft �  http://www.ftc.gov/bcp/edu/microsites/idtheft/

�  FTC �  For cases of identity theft, contact the FTC at www.ftc.gov/idtheft or

call 1-877-ID THEFT (438-4338)

Helpful Websites

Office for Older Americans home page (links to Money Smart for Older Adults, blog, etc.) www.consumerfinance.gov/older-americans �  To sign up to Older Americans email list: olderamericans@cfpb.gov Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults: Interagency

Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults, Sept. 24, 2013 http://files.consumerfinance.gov/f/201309_cfpb_elder-abuse-guidance.pdf

FinCEN Advisory on Filing SARs regarding elder financial exploitation, Feb. 22, 2011 http://www.fincen.gov/statutes_regs/guidance/html/fin-2011-a003.html Managing Someone Else’s Money guides:

�  Blog post with links: http://www.consumerfinance.gov/blog/managing-someone-elses-money/ �  Power of attorney guide:

http://files.consumerfinance.gov/f/201310_cfpb_lay_fiduciary_guides_agents.pdf �  Guardian guide:

http://files.consumerfinance.gov/f/201310_cfpb_lay_fiduciary_guides_guardians.pdf �  Trustee guide: http://files.consumerfinance.gov/f/201310_cfpb_lay_fiduciary_guides_trustees.pdf �  Representative payee/VA fiduciary guide:

http://files.consumerfinance.gov/f/201310_cfpb_lay_fiduciary_guides_representative.pdf �  Order hard copies in bulk: http://promotions.usa.gov/cfpbpubs.html#special

 Money Smart for Older Adults: Download module, find dates for training: www.fdic.gov/moneysmart

�  Order participant/resource guide: http://promotions.usa.gov/cfpbpubs.html#special

CFPB Helpful Websites

QUESTIONS

Preventing Financial Exploitation of Elders

This session is worth 1.8 credits (Keep this for your records)

AAP Continuing Education Credits

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�  Phone: 262-345-1245 �  Toll Free: 800-453-1843 �  Fax: 262-345-1246 �  info@wacha.org

Resources

Laura Nelson, AAP, NCP

lnelson@wacha.org

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