This Holiday Season, Help Prevent Elder Financial Abuse
by Amy Kleinschmit
Chief Compliance Officer

A few months ago AARP had a story which included discussion on two high profile cases that involved alleged elder financial exploitation – both very upsetting and both involving well known Americans – Stan Lee and Buzz Aldrin.

A stat included in the article from the National Center on Elder Abuse is troubling and shows us why being vigilant for elder financial abuse is so important, especially during the holiday season. “Ninety percent of perpetrators are family members or other people the victim knows well, such as caretakers, neighbors or friends.”

In March 2016, the Consumer Financial Protection Bureau (CFPB) issued “Recommendations and report for Financial Institutions on preventing and responding to elder financial exploitation,” which can be found here. In this report, the CFPB found that, “Elder financial exploitation has been called the crime of the 21st century and deploying effective interventions has never been more important. Older people are attractive targets because they often have assets and regular income. These consumers may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, or bereavement. Elder financial exploitation robs victims of their resources, dignity and quality of life—and they may never recover from it.”

The accompanying Advisory to this 2016 report, which can be found here, contained recommendations for credit unions to help prevent and respond quickly to elder abuse exploitation. Remember – credit unions play a vital role in preventing and responding to this type of elder abuse as you are uniquely positioned to detect that an elder account holder has been targeted or victimized, and to take action.

The CFPB makes the following recommendations that credit unions can take to protect your aging members:

  • Develop, implement and maintain internal protocols and procedures for protecting account holders from elder financial exploitation.
  • Train management and staff to prevent, detect, and respond to elder financial exploitation – (mark your calendar for free upcoming training from CUAD – discussed below)
  • Detect elder financial exploitation by harnessing technology.
  • Report all cases of suspected exploitation to relevant federal, state and local authorities.
  • Protect older account holders.
  • Collaborate with other stakeholders.

These recommendations are discussed in more detail in the CFPB Advisory and Report at the above links – be sure to review so you can help protect your members this holiday season, and year round.

With regard to reporting, it is obviously important to consider privacy rules and regulations. Eight federal agencies issued this guidance in 2013 to address these concerns: Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults.

Another important piece of guidance was issued by the Financial Crimes Enforcement Network (FinCEN) in 2011 relating to filing Suspicious Activity Reports (SARs) regarding elder financial exploitation which can be found here. Staff preparing SARs should be familiar with this advisory as it offers guidance on properly completing the SAR to assist law enforcement in its efforts to target instances of financial exploitation/abuse of the elderly. Remember, “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.”


Red Flags. 

Both the CFPB Report and the FinCEN advisory offer examples of red flags that can be helpful in detecting (and therefore preventing and reporting) elder financial abuse.

The list below comes from the FinCEN 2011 advisory. Rmember, “red flags” identifies only possible signs of illicit activity. Credit unions need to evaluate indicators of potential financial exploitation in combination with other red flags and expected transaction activity being conducted by or on behalf of the member. Additional investigation and analysis may be necessary to determine if the activity is suspicious.

Erratic or unusual banking transactions, or changes in banking patterns:

  • Frequent large withdrawals, including daily maximum currency withdrawals from an ATM;
  • Sudden Non-Sufficient Fund activity;
  • Uncharacteristic nonpayment for services, which may indicate a loss of funds or access to funds;
  • Debit transactions that are inconsistent for the elder;
  • Uncharacteristic attempts to wire large sums of money;
  • Closing of CDs or accounts without regard to penalties.

Interactions with customers or caregivers:

  • A caregiver or other individual shows excessive interest in the elder’s finances or assets, does not allow the elder to speak for himself, or is reluctant to leave the elder’s side during conversations;
  • The elder shows an unusual degree of fear or submissiveness toward a caregiver, or expresses a fear of eviction or nursing home placement if money is not given to a caretaker;
  • The financial institution is unable to speak directly with the elder, despite repeated attempts to contact him or her;
  • A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the elder without proper documentation;
  • The customer moves away from existing relationships and toward new associations with other “friends” or strangers;
  • The elderly individual’s financial management changes suddenly, such as through a change of power of attorney to a different family member or a new individual;
  • The elderly customer lacks knowledge about his or her financial status, or shows a sudden reluctance to discuss financial matters.

South Dakota’s Office of Adult Protection Services also provides these additional indicators of financial exploitation that credit unions should be aware of:

  • Unusual activity in bank accounts.
  • Power of attorney given when the person is unable to comprehend his or her financial situation, and in reality, is unable to give a valid power of attorney.
  • Refusal manage funds appropriately when given the responsibility.
  • Recent change of title of house in favor of a "friend" when the elder is incapable of understanding the nature of the transaction.
  • Checks and documents signed when the older person cannot write.
  • Signatures on checks or other documents by someone other than the owner of the account or a forged signature.
  • Loss of personal belongings such as art, silverware, jewelry, or other valuable property.
  • The inclusion of additional names on a bank signature card

More Resources for Credit Unions.

Protecting older adults from fraud and financial exploitation. Find FREE guides and information material, including: “Money Smart for Older Adults;” consumer advisories on preventing fraud; placemats that can be provided which include tips to avoid common financial scams.

CU Policy Pro includes model policy 2245: Protection the Elderly and Vulnerable from Fraud. Remember every credit union has unlimited access to this product as a due supported service. With regard to this particular policy, the credit union may need to tailor at least the first paragraph to incorporate specific state law definitions in your particular state for elder and vulnerable adults. – includes resources for preventing elder financial abuse.

South Dakota resources –

North Dakota resources -


FREE Webinar Ahead for CUAD Members. Registration will be opening soon for a free webinar from Baldini Lang that will take place on January 15th. This past summer, the Economic Growth, Regulatory Relief and Consumer Protections Act (S.B. 2155) was signed into law. Section 303 of the new law provides legal immunity for properly trained financial services employees who disclose concerns about financial exploitation of senior citizens. Join Rich Lang as he covers how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen and discussion on the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution. We will have additional information in the Memo when registration opens, but please mark your calendars now.



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