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Protecting Older Americans from financial abuse

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We took an important step today towards looking out for older American consumers. Director Richard Cordray announced a public inquiry to learn more about the many ways in which older Americans are financially exploited and about the best practices for elder financial management.

Congress gave my Office for Older Americans a broad mandate to look out for the consumer financial interests of older Americans. As part of that work, we are keenly focused on the important issue of financial abuse and exploitation of the elderly. According to a recent study, seniors lost at least $2.9 billion to financial exploitation in 2010. Unfortunately, it is a growing trend. From 2008 to 2010, there was a 12 percent increase in the amount of money scammed from seniors.

The CFPB wants to hear from the public – especially people working directly with seniors – about these issues. In particular, we want input on how seniors can best determine the legitimacy of the credentials of financial planners and advisors. We’re also seeking information on what financial education, counseling or management programs are tailored to the unique needs of older Americans, their families, and their caregivers. We want to know what programs exist and and how effective they are.

We are looking out for our senior veterans, too. The Bureau wants feedback on what specific types of fraudulent, unfair, abusive, or deceptive practices target older veterans or military retirees. We know that Veterans Affairs “Aid and Attendance” benefits exploitation and military pension buyout schemes are being used in ways that can put veterans’ assets and pensions at risk. We want to learn more so we can better help older veterans and military retirees protect themselves.

The information we gather will benefit senior consumers in many ways. As my Office conducts its research on certifications and designations of senior financial advisors, the information we hope to gather here will give us a better picture of what is happening in the marketplace. With that information we can let seniors know where to look for fair and sound advice from reliable resources. Then they can make their own informed choices.

We want our inquiry to be as complete as possible and we need your input. The information gathered from this Request for Information will help guide future work for the Bureau and my office. We want to help seniors avoid fraud and make good, responsible decisions when they make financial choices. So please let us know about your experiences, good and bad.

We look forward to hearing from you.

  • http://www.facebook.com/people/Erna-E-N-Boldt/1107704950 Erna E. N. Boldt

    Since elder abuse and financial fraud, or exploitation is no secret in America, we do not need another “Blog” or another “Statistic”  seeking entity, we need enforcements of the laws we do have.

    Over years of exploiting seniors by court appointed trustees, wards, or conservators has grown to enormous proportions, including the involuntary taking of an elders property, self-determination and freedom.

    Stop the talk – we demand ACTION.

  • Diogenes (Google it)

    I think senior citizens have far more reason to fear financial abuse from lawyers and the court system than from other sources. I was recently told by a lawyer that  many estate lawyers routinely embezzle funds from senior’s estates and trusts when they pass on. He said that some lawyers are like pigs, nibbling away at the estate assets, and some are like hogs, taking a big bite out. He then asked me if I knew why it was so easy for the lawyers to do this, and I said no. He said it was because estate trusts are not overseen by the court, so that whatever figure for the total assets the lawyer presents after embezzling funds is simply accepted. And the court system itself turns a blind eye to this common practice anyway because the county judges and lawyers all work together and protect each other.

    And if the majority of the beneficiaries of the will and trust are senior citizens as well, then the financial exploitation of the elderly is occurring on both ends, the senior passing on the inheritance, and the seniors inheriting it. The 2.9 billion quoted above that is lost to financial exploitation of senior citizens is probably only the tip of the iceberg. It does not take into consideration this secret underground lawyer exploitation of senior citizens. And the county legal system will do nothing about it because it benefits them. This type of exploitation is considered too small to look into by federal investigators, and the State Attorney General just refers you back to the county to address it. For this type of financial exploitation of senior citizens, the justice system is actually an “injustice system”.

  • Mtbranche

    Enforcement of our rules in this country is being over-monitored by international lenders who do not understand our customs. We have already tried the Marchman or Chapman Acts (Amendments 18 and 21 to the US Constitution) where they are both thrown out of Federal or Supreme Court Hearings because they include the Baker Act which is designed to prevent harm to our government. When the so-called States attempt to carry theses malicious cases in the peaceful community.Customs are not checked at the airport ot Port Authority, they are in our banks, supermarkets, shipping depots, and private dwellings. The ‘trickle down’ philosophy in taxation has “”brought the carcinogens. in tobacco (foof) and alcohol (pharmaceutical chemicals) down into the areas zuch as school.lunch programs, where minor children have developed a”ging diseases zuch as diabetes or hyperlipidemia.

  • Rsnp

    I work in the banking industry in a small to medium size rural community. One of the biggest, if not  the biggest problems for the elderly is fraud committed against them by family members. Even if you point it out to elderly what is going on, they are reluctant to do anything. It’s only when other family members become aware of what is going on and step in to stop it does anything happen. They then want the bank held responsible even though the bank has tried to stop it by talking and couunseling the customer. What’s the govt role here – provide a family babysitter or over seer to montior each elder’s actions. There are plenty of cases where the elderly get victimized by contractors, salespeople, legal counsel etc. They are all victims just like everyone else is in dealing with these people. Question maybe should be asked – “is where are the family members who will honestly and ethically take care of the elderly?” rather than join the lists of the guilty?  Why has society degenerated itself down to the level that allows this?  

  • Anonymous

    No power of attorneys should be allowed on the initial 1009 application. The loan originator should be required to meet with borrower(s) face to face to ensure they are understanding the loan and the requirements that are involved with this type of loan.  While HECM Counseling is required, a face to face interview is an added extra step that could save an elderly person from being financially abused.

  • Brokers Unite

    Brokers would like to cut the red tape and get back to being able to credit senior closing costs from lender compensation.  I want to give older Americans money to cover closing costs on reverse mortgages with out having to change broker lender comp plans to accommodate.  This should be priority number one!!!!!  How is this compensation rule a benefit to the borrower?  level the playing field are lenders and banks too big to fail?

  • nocowgirl

    a dress style is a ‘trend’, what car to lease is a ‘trend’ – the exploitation and downright theft of an older parent’s assests or meager social security check is a CRIME and is epidemic here in Wisconsin.  There is often emotional abuse involved as well and sometimes physical abuse of the older person or a beloved pet.

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