Elder Financial Exploitation

Sadly, we’ve all seen, heard, or read articles regarding the proliferation of scams during the past two years. I would venture to guess that most of you are like me … nothing gets my blood boiling more than hearing about those schmucks out there who have scammed and defrauded an elderly person. I remember my own parents and grandparents and how hard they worked for every dime they earned, and I can’t understand how anyone would think it’s acceptable to exploit the elderly population.

On June 15, 2022, FinCEN issued an advisory which highlights behavioral and financial red flags to help financial institutions identify, prevent, and report suspected elder financial exploitation (EFE). EFE is defined as the illegal or improper use of an older adult’s funds, property, or assets. The advisory points out that elder abuse, including EFE, affects at least 10% of older Americans each year and that the estimated dollar value of suspicious transactions linked to EFE exceeded $3.4 billion in 2020. What’s even more upsetting is that many of the perpetrators are known and trusted persons of the older adults, but there is a rising trend of scams that originate outside of the U.S. by individuals that have no relationship with the victim.

Many years ago, FinCEN added a specific category for EFE to the suspicious activity report (SAR). But in addition to filing a SAR, financial institutions should refer their older customers who may be a victim of EFE to the Department of Justice’s National Elder Fraud Hotline (833-FRAUD-11). Many states also have requirements that financial institutions contact local law enforcement or the applicable state’s Department of Aging or similar agency to report such activity. If you aren’t filing EFE SARs, you may need to beef up your controls – keep in mind that according to FinCEN the MAJORITY of EFE incidents go unidentified and unreported.

The newest advisory is linked here for your convenience. Even if you think, “Oh, that’s a Compliance or BSA matter” - think again. We all have elderly loved ones who can fall victim to a scam, so educate yourself and help protect them! https://www.fincen.gov/sites/default/files/advisory/2022-06-15/FinCEN Advisory Elder Financial Exploitation FINAL 508.pdf

Authored by: Joann Lang, CAMS, CIA, CCBP