National Consumer Protection Week provides an opportunity to talk about a particularly troubling and challenging consumer protection issue – elder financial abuse and exploitation. Understanding what elder financial exploitation can look like and why it can be hard to spot can help you protect yourself, your loved ones, or someone you care for who may be at risk for this kind of abuse. I’ll also tell you about what the Bureau is doing to combat elder financial abuse, as well as tools that you can use to protect yourself or those around you.
Over the past couple of months, I’ve heard about several cases that vividly illustrate the challenges we face in working to prevent elder financial exploitation.
Some of these cases include the story of a former in-home caregiver and her husband who were indicted in Georgia for allegedly defrauding an elderly veteran with dementia of about $182,000. More charges are expected, and police say the couple took about $500,000 from the 80-year-old man.
In another case, a handyman convinced an elderly woman to give him power of attorney. He took out a reverse mortgage on the home which the woman had owned since the 1950s, and she never saw any of the money. She almost lost her home due to the scam.
I also heard a disconcerting story about how the CEO and CFO of a California investment firm were charged with 66 felony counts of elder abuse, securities fraud, and conspiracy for bilking older investors of more than $2.3 million over an eight-year period.
The Government Accountability Office identified cases that are particularly thorny for social service, criminal justice, and consumer protection agencies. These cases involve exploitation by in-home caregivers, agents with power of attorney, and financial service providers—exactly the kinds of cases I mentioned above. These cases also demonstrate why family members or others who have close contact with older adults can play an important role in spotting and preventing elder financial abuse and exploitation.
The GAO described other themes I’ve heard as I’ve traveled the country:
- Older adults need more information about identifying and avoiding financial abuse, but social service and law enforcement agencies often lack the resources to educate older consumers.
- Financial institutions are well-positioned to recognize and report exploitation, yet they often don’t share information with agencies that can help victims or prosecute perpetrators.
- Social service, law enforcement and other stakeholders must collaborate to make headway against financial abuse of older adults—and the federal government can help support these cooperative efforts.
At the inaugural meeting of the Elder Justice Coordinating Council last fall, we heard concerns that echo what the GAO reported. I shared those concerns with Congress shortly after the report came out. I also detailed the work our Office for Older Americans is doing to combat some of these problems. We are:
- Developing guides for family members and others with legal authority to handle money for older relatives or friends, but who may not have formal training. The guides will help people understand proper record keeping, good frameworks for investing, and other basics of managing a vulnerable adult’s money. They also will help people recognize and respond to financial exploitation.
- Producing a guide for people who operate group living centers dedicated to serving older adults, such as nursing homes or assisted living facilities. We are also establishing partnerships with organizations to help distribute this information.
- Partnering with the FDIC to create Money Smart for Older Adults, a community education and training program for older adults and for caregivers.
- Coordinating with stakeholders in several states to create and sustain multi-disciplinary older American protection networks.
- Developing strategies to communicate that the Gramm-Leach-Bliley Act generally does not prohibit companies from reporting suspected elder financial exploitation. For many of them, this is often a point of confusion.
You can get more details on these and other federal efforts by reading what I said to Congress last November.
If you have your own experience with elder financial exploitation or confusing information on how to recognize or respond to it, please tell us your story. You can also learn more about preventing elder financial exploitation and abuse in your community.