Detection and Prevention of Elder Abuse by Financial Institutions Neil Baritz, Esq. Baritz & Colman LLP (561)

Statistics On Elder Abuse  Elderly Americans lost $2.9 Billion dollars in 2009 as a result of elder abuse.  The Centers for Disease Control and Prevention estimate that over 500,000 elder Americans suffer from financial elder abuse annually.  A 2011 study conducted by Met Life found that 51% of the reported cases of elder abuse were perpetrated by strangers and 34% were perpetrated by friends and family.  Most victims of reported cases of elder abuse are women between the ages of who live alone.  It is estimated that only 1 in 14 cases of elder abuse ever gets reported to the appropriate authorities.  A “typical” victim is between 70 and 89, white, female, frail, cognitively impaired, trusting, and often lonely or isolated. 1

What is a “Senior Investor”  “Any discussion about seniors raises the obvious question of who, exactly, is a ‘senior investor.’ Because investors of any age do not necessarily share the same characteristics, investment objectives, risk tolerances, or financial profiles, any definition of the term ‘senior investor’ would be either under-inclusive or over-inclusive. Thus, we do not define ‘senior investor’ by reference to a specific age, but rather use the term to include investors who have retired or are nearing retirement.” 2  Anyone over the age of 50 can qualify for AARP.

Types of Financial Exploitation  Theft  Fraud  Electronic  Investment  Insurance

What are the Warning Signs?  Interactions with Customers or Caregivers:  Caregiver shows excessive interest in customer’s finances/ doesn’t let the customer speak for himself  The customer shows an unusual degree of fear towards the caregiver.  A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the elder person  Customer moves away from existing relationships (personal and professional  Sudden change in Power of Attorney  The customer lacks knowledge about his or her financial status

What are the Warning Signs?  Erratic and Unusual Banking Transactions:  Frequent large withdrawals, including daily maximum currency withdrawals from an ATM  Sudden insufficient fund activity  Uncharacteristic nonpayment for services  Termination of vital utilities/essential services  Foreclosure or evictions  Debit Transactions that are inconsistent for the elderly  Uncharacteristic attempts to wire large sums of money, especially to foreign countries  Different signatures on checks and wire requests  Sudden increases in debt  Closing of CD’s or accounts without regard to penalties

What Can You Do to Identify Elder Abuse?  Have a clearly designated department, committee or individual that is responsible for the investigation and reporting of elder abuse.  Have a protocol for lower-level employees to notify their supervisors about any unusual activity they see.  Ensure that internal protocols address elder abuse and have follow up protocols designed to identify potential abuse and how to act upon it.  Sufficient documented client follow-up!

When to Report to APS, Local Authorities, or File a SAR Remember, it is not your job to prove abuse.  Reporting requirements vary from state to state, some specifically require financial institutions to report suspicions of elder abuse while others generally indicate that financial institutions should report it.  There is minimal liability for reporting suspected instances of elder abuse; each state APS statute generally provides immunity if such reports are made in good faith.  The Gramm-Leach Bliley Act provides protections to the reporting entity for voluntary and mandatory reporting, if made to the appropriate authorities.