Elder financial abuse is “widespread” and on the rise, according to a report from the Consumer Financial Protection Bureau. The CFPB analyzed 180,000 elder financial exploitation SARs filed with FinCEN from 2013 to 2017 involving more than $6 billion.
SAR filings on elder financial exploitation quadrupled in that time period—financial institutions filed 63,500 SARs reporting elder financial abuse. Older adults ages 70 to 79 lost an average of $43,300. If the older adult knew the suspect, the average loss was larger, about $50,000.
That rise in SARs isn’t necessarily matched by a rise in reports to local law enforcement. Fewer than one-third of elder financial exploitation SARs specify that the financial institution reported the activity to adult protective services, law enforcement, or other authorities.
Financial institutions walk a tightrope when reporting suspected elder financial abuse, balancing customer privacy requirements with concern over suspicious transactions. In Minnesota, financial institutions are required to cooperate with a lead investigative agency, law enforcement, or prosecuting authority investigating maltreatment of a vulnerable adult and to “comply with reasonable requests for the production of financial records” as authorized by law. Financial institutions are immune from “any civil or criminal liability that might otherwise result” from complying with the relevant statute.
Community banks who are familiar with their older customers “are in a unique position to spot irregular transactions, account activity, or behavior,” the Minnesota Commerce Department said in guidance on its website. “Financial institutions are on the front lines to help stop financial abuse of senior citizens, identifying irregularities in a customer’s financial activity and reporting it to the appropriate authorities.”
ICBM is currently researching legislation that would help eliminate this kind of fraud by providing financial institutions more options when they observe financial abuse.
Gov. Tim Walz’s budget proposes to help protect older Minnesotans against financial fraud and exploitation by continuing and enhancing the Commerce Department’s Senior Financial Fraud Prevention Education and Outreach initiative.
The initiative seeks to stem financial abuse through the distribution of its fraud prevention toolkit; translation of information to make it accessible and relevant to vulnerable ethnic/immigrant communities, and advertising. It also provides prevention presentations to Minnesota seniors and their families in communities throughout the state, as well as training for businesses, organizations, and professionals working with older Minnesotans.
According to the Minnesota Elder Justice Center, some indicators of elder financial abuse are:
A law passed in Minnesota last summer also allows financial advisers and brokers to delay some withdrawals and transfers to give investigators time to act, and it makes reporting suspicious activity easier and clearer. Those who act in good faith to report suspicious activity are also now immune to administrative and civil liability for reporting.