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We’re helping long-term care facilities protect older Americans from financial exploitation

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We’ve heard a lot of stories about vulnerable adults falling prey to con artists, family members, fiduciaries, and professional advisers who steal their nest eggs and threaten their financial security.

A son steals $315,000 from his elderly mother’s retirement accounts and frequents casinos. When he doesn’t pay his mother’s rent, she’s evicted from her assisted living facility.

The pastor of a 77-year-old man with Alzheimer’s and Parkinson’s diseases makes 130 withdrawals from the man’s bank account but fails to make nursing home payments on his behalf for nine months. The man was nearly discharged from his nursing home.

These stories are all too common. We’d like to equip assisted living and nursing facility staff with the know-how to prevent and spot the warning signs of abuse, so we’re releasing a guide to protecting residents from financial exploitation.

Our action-oriented guide gives staff the tools to:

  • Prevent financial exploitation and scams by educating staff, residents, and family members about warning signs and precautions
  • Recognize, record, and report financial abuse as early as possible using a model protocol and a team approach
  • Get help from first responders in the community

What you can do

If your family member or friend lives in an assisted living or a nursing facility, share this manual with the administrator and professional staff. You may want to read it as well to learn some of the signs of financial exploitation and where to go for help.

Some signs of abuse

Here are some warning signs that a long-term care resident is being financially exploited or abused:

  • Possessions disappear from a resident’s room or apartment
  • Resident pressured to make a decision or sign a document “now”
  • A previously uninvolved person claims authority to manage a resident’s care and/or finances but does not provide documentation
  • Unpaid facility bills
  • Resident’s checkbook or check register shows checks made out to “cash” frequently or check numbers out of sequence
  • Frequent or costly gifts to facility staff or volunteers

Order your free single or bulk copies of the guide to protecting residents from financial exploitation.

Consumer advisory: 3 things to keep your retirement plan on track

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Compared to a decade ago, there are fewer older homeowners who own their homes free and clear. Older homeowners are also carrying more mortgage debt. While the share of older homeowners with a mortgage increased from 22 to 30 percent between 2001 and 2011, the median amount of their mortgage debt grew from about $43,400 to $79,000.

For many of the roughly 4.4 million retired homeowners with mortgages, making monthly mortgage payments on a fixed income on top of other monthly expenses is a hardship. You can read more in our snapshot of older consumers and mortgage debt.

We’ve got some things you can do to keep your retirement plan on track.

1. Plan for your mortgage pay-off date

For most older homeowners, maintaining their home is their largest expense during retirement, especially if they carry a mortgage. Making your mortgage pay-off date a part of your retirement plan will help you to manage and afford your housing costs.

For some, owning their home free and clear allows them to handle their monthly expenses and have a reserve on hand in case a financial emergency arises. Aiming for a mortgage payoff date that is earlier than your planned retirement age can help you manage expenses if your income decreases unexpectedly. While carrying a mortgage in retirement may not be a hardship for everyone, it’s always a good thing to include your mortgage pay-off date in your retirement plan.

Before paying off your mortgage, you may wish to discuss any tax and estate implications with your attorney, tax accountant or other financial professional.

2. Be careful when getting a new mortgage, refinancing, or tapping into your home equity

Many consumers take on new loans or refinance their existing mortgages to get a lower interest rate and/or monthly payment. Pay attention to the term of your new mortgage as it can affect your retirement plan. For example, taking on a new 30-year mortgage when you are nearing retirement can become a hardship later. Consider choosing a shorter-term mortgage, such as 10 or 15 years, when refinancing or buying a new home when you are close to retirement. You’ll have higher monthly payments now, while you’re still working, and be less likely to still have a mortgage in retirement.

If you’re considering getting a home equity loan or a reverse mortgage, you should revisit your retirement plan. Some people use their home equity to pay for varied expenses, such as home improvements, consolidating debt, medical bills or college tuitions. Consider how you will pay for unanticipated expenses in the future if you draw down on your equity now.

Using your home equity to consolidate credit card or other debts can be risky. A home equity lender can foreclose on your home if you miss payments.

3. Estimate your retirement income and expenses

Generally, people have less income when they retire. Retirement income (from pensions, social security, annuities, and other savings) typically won’t fully replace your work earnings. One study estimates that half of retirees without a pension will receive less than 65 percent of their pre-retirement income.

Knowing your expected retirement income and expenses is important, especially if you’re retiring with a mortgage. You’ll be able to plan and budget for your mortgage payments and other living costs, even if your taxes, insurance, and other housing costs go up.

Some expenses to keep in mind:

  • Older consumers often spend more for their health care and/or long-term care needs later in life than in their younger years.
  • Monthly mortgage payments on top of paying other monthly living expenses can pose a hardship or prevent you from meeting your retirement lifestyle goals. In 2011, older homeowners with a mortgage spent $800 more per month than their counterparts with no mortgage.
  • If you plan to age in your home, you may need to pay for home modifications. Adapting your home to age in place can cost thousands of dollars.

Resources to take action

Get your questions answered. We’ve got answers to your questions about mortgages and other topics.

Get help. If you’re behind on your mortgage, or having a hard time making payments, we want to get you in touch with a HUD-approved housing counselor. We can help you find housing counselors near you.

Start making a plan. Calculate how much you’ll need and how to budget for retirement.

Submit a complaint if you have a problem with your mortgage. You can submit a complaint online or by calling (855) 411-2372 or TTY/TDD (855) 729-2372. We’ll work to get you a response from the company.

What’s the deal with health care credit cards? Four things you should know

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Recently, many patients facing medical procedures have seen their health care providers suggest deferred interest rate credit cards as a payment option. Unfortunately, health care providers don’t always explain how these deferred interest credit cards work. We want to make sure that you get the facts you need.

Four things to know about cards with deferred interest rates

This type of credit card isn’t new. You may have seen ads on television, online, or in retail shops for promotional rates like zero-percent interest for the first year. No matter where the credit cards come from—a medical office or a mall store—they have a few features in common. Here’s what you need to know:

1. How to avoid paying interest

Make on-time payments each month and pay off your balance by the end of the promotional period. Minimum payments usually aren’t enough to pay off your entire balance by the end of the promotional period, so think about paying more than the minimum amount each month. Or, save up enough to pay the final amount before the promotional period ends.

2. What happens at the end of the promotional period

If you haven’t paid off the balance for your purchase when the promotional period ends, you’ll be charged interest on your balance for each month, starting from when you first made the purchase. Your credit card company must tell you the date by which you must pay off your balance to avoid paying interest. The date must appear on the front of your bill. If you aren’t sure when your promotional period ends, call your credit card company.

3. Using the card for other purchases

Before using the card again, check with the credit card company to see if you have a “grace period” and how it works. Without a grace period, you’ll pay interest on new purchases from the date you make them.

4. Details matter

Keep track of minimum payments and payment addresses to make sure small errors don’t add up to large interest and penalty charges.

Case in point: GE CareCredit cards

We brought an enforcement action against GE CareCredit to prevent deceptive and unfair credit card enrollment tactics. The enforcement action came after an investigation, where we found that consumers got incorrect information about how their cards worked, and later submitted complaints to us.

As a result of our enforcement action, all consumers enrolling in the CareCredit card in a health care provider’s office will receive a comprehensive “welcome” call from CareCredit within two to three days of enrollment. Certain consumers who sign up for a CareCredit card will speak directly to a representative prior to any enrollment or purchase of services. Additionally, CareCredit will enhance their disclosures to warn consumers when their promotional period is about to end. The company will also do more training of health care office personnel who offer the card. Finally, we ordered CareCredit to reimburse up to $34.1 million to customers who were victims of their deceptive credit card enrollment tactics.

Actions you can take

If you’re having trouble with a deferred interest credit card, you can submit a complaint online or by calling (855) 411-2372.

For more answers about how deferred interest medical credit cards work, check out Ask CFPB.

Know your financial adviser

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Just like planning for retirement, choosing a financial adviser can be much more challenging than it sounds—especially for senior needs. Today, we’re releasing “Know your financial adviser,” a guide to help you ask the right questions if you’re shopping for an adviser with a title suggesting expertise in senior financial planning. Titles like “veteran’s adviser,” “retirement adviser,” “senior specialist,” “benefits coordinator” or even “financial planner” don’t always mean the professionals are qualified to help you manage your money. Some titles require in-depth training, while others are easily picked up over a weekend.

For some military retirees, the decision is complicated even further by the need to find an adviser who understands the complexity of their retiree pay, veteran’s benefits, or disability benefits. This adviser should also understand the full financial impact of other benefits like TRICARE, commissary privileges, survivor benefit plans, and veteran’s service organization membership benefits.

Here are four things to think about when evaluating a financial adviser’s title or credentials:

  • How much training is required? Senior financial planning is a complex field which includes topics like estate planning, income tax laws, and investments. Some titles therefore require college-level coursework and passing tough exams, which can take many months or even years to complete.
  • Is your adviser qualified through a training program that holds its members to strict ethical standards? You should be able to file a complaint easily with the organization that issued your adviser’s financial title, as they may discipline or ban members who don’t follow the rules.
  • Is your adviser’s financial title accredited? Accredited programs have taken important steps to ensure the quality of their training.
  • Does the adviser have an extensive background working with a specialized group like military retirees? Just because someone calls themselves a veteran’s adviser doesn’t mean they know anything about military retiree pay systems, veteran benefits, or even the military, for that matter.

In addition to learning how to find a qualified financial adviser, you can also protect yourself by learning how to spot signs of potential financial fraud by phony advisers looking to exploit you.  You can download a copy of our previously released Money Smart for Older Adults – Prevent Financial Exploitation guide to help you spot the warning signs.

Most financial advisers have worked hard to earn the knowledge and skills required to help you. But credentials and promises alone don’t guarantee expertise or the quality of someone’s training. It’s up to you to look closely at the training, background, and quality of service when picking someone who promises to help you protect and grow your well-earned nest egg.

To learn more about our work on senior designations, read our guide.

Managing someone else’s money

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Millions of Americans are managing money or property for a loved one who is unable to pay bills or make financial decisions. This can be very overwhelming. But, it’s also a great opportunity to help someone you care about, and protect them from scams and fraud.

We are releasing four easy-to-understand booklets to help financial caregivers. The Managing Someone Else’s Money guides are for agents under powers of attorney, court-appointed guardians, trustees, and government fiduciaries (Social Security representative payees and VA fiduciaries.)

The guides help you to be a financial caregiver in three ways:

  • They walk you through your duties.
  • They tell you how to watch out for scams and financial exploitation, and what to do if your loved one is a victim.
  • They tell you where you can go for help.

You can also order free print copies (including bulk orders) online soon.

We’re working hard to empower older Americans to have a secure financial future. Sometimes family members, caregivers and others in the community must pitch in. We’re here to help you, too.

Banks can help spot elder financial exploitation and abuse

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An older Oklahoma resident began receiving sweepstakes offers in the mail after her 90-year-old husband moved into a nursing home. Just send $50, $100, $2000, even $5000 to claim your prize, they promised. When she asked a bank employee to help her send a large amount of cash in the mail, the bank investigated. It turned out the older customer had been writing as many as 90 checks a month to collect promised prizes that never materialized. The bank contacted the Postal Inspection Service to investigate and the authorities intervened.

A 98-year-old lawyer was scammed by a purported friend who loaned him office space and then accessed financial records stored there. When the older man was hospitalized for hip surgery, the 76-year-old friend drained $330,000 from bank accounts and used the money to pay for a trip to Puerto Rico and purchases at a variety of stores. Ultimately, the victim’s banks alerted authorities because of concerns about unusual activity on the accounts.

As we travel the country, we hear more stories of banks, credit unions, money transmitters, and other financial services providers spotting financial abuse targeted at older adults. Some of these are success stories like the ones we just shared: the financial institution makes a timely report, and authorities can prevent the theft, prosecute the perpetrator and help the victim.

But sometimes financial institution personnel are confused. They want to help protect the consumer, but are unsure whether privacy laws allow them to share a consumer’s personal information with law enforcement and other authorities that can take action.

That’s why today, along with seven other federal agencies, we released guidance on this issue for financial institutions. The guidance clarifies for banks and other financial services providers that reporting suspected elder financial exploitation to appropriate authorities does not generally violate the privacy provisions of the Gramm-Leach-Bliley Act, a federal law.

Reporting elder financial abuse is the right thing to do

Financial institutions often spot the red flags for abuse sooner than anyone else. We can only stop the financial exploitation of older adults through coordinated efforts at the community, state and national levels. Please join us in working to prevent, detect, and respond to this national problem and help prevent a disaster from happening to vulnerable elders across the country and in your community.