Bureau Releases Guide to Assist in Recognizing, Recording, and Reporting Abuse and Scams
WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released a guide to help assisted living and nursing facility staff better protect the people in their care by preventing and addressing financial abuse and scams. The guide helps staff recognize, record, and report financial mistreatment by family members or other trusted people handling the finances of an incapacitated adult. The guide also addresses prevention of a wide variety of financial exploitation and scams.
“Financial exploitation and scams can put seniors in danger of losing their housing and nursing care by robbing them of the money to pay for that assistance,” said CFPB Director Richard Cordray. “Today’s guide to assisted living and nursing facilities can help staff detect and protect against these troubling crimes.”
One recent study estimated that older Americans lost at least $2.9 billion to financial exploitation by a broad spectrum of perpetrators in 2010. Another study concluded that about 5 percent of Americans over the age of 60 experience financial mistreatment by a family member each year.
Older adults with cognitive impairments are particularly vulnerable to financial exploitation and scams, especially when seniors have memory problems or cannot keep track of finances. Even mild cognitive impairment – before full-blown Alzheimer’s disease – increases risk, and 22 percent of Americans over the age of 70 have mild cognitive impairment. About half of nursing facility residents, and 40 percent of those in assisted living facilities, have dementia.
The people exploiting older adults are often family members or other trusted people who are handling the finances of an incapacitated parent, relative, or friend. The financial arrangement may be informal – or based on a formal grant of authority to a fiduciary, such as an agent under power of attorney or a guardian. They may take money without permission, fail to repay money they owe, charge too much for services, or just not do what they were paid to do. The financial wrongdoing may have begun at the time of admission to the facility or may go back months or years.
Today’s guide is for assisted living and nursing facility managers and staff who are in a key position to protect the people in their care from financial exploitation. Today’s 40-page manual says successful intervention includes:
- Recognizing: Because financial abuse is often ongoing, early identification of a problem can be critical. Today’s guide advises a facility to assemble a team that will implement a system for early, effective responses to perceived financial exploitation through regular periodic meetings, case review, and coordinated action. Warning signs of trouble include: unpaid facility bills; frequent or costly gifts to facility staff or volunteers; a resident’s checkbook showing frequent checks made out to “cash” or check numbers out of sequence; observing or overhearing a resident pressured to make a decision or sign a document immediately; or seeing a previously uninvolved person claim authority to manage a resident’s care and/or finances without proper documentation.
- Recording: Facility managers should consult with staff members who may have observed relevant behavior to build appropriate records of financial abuse. Direct care and housekeeping or maintenance staff may be the most familiar with the resident. Facility managers should encourage them to talk about their concerns and include their observations. Law enforcement and other first responders will need dates, times, locations, statements, physical evidence, and the names of witnesses to build a case.
- Reporting: There are specific federal requirements for nursing homes to report financial crimes, including exploitation or theft, directly to law enforcement. Facility managers should take action as soon as warning signs appear. State agencies that also investigate reports include Adult Protective Services, licensing agencies, and the long-term care ombudsman. Facility administrators should be aware of their state’s reporting requirements for all of these.
Scams and fraud by strangers arise even in protected settings like assisted living and nursing facilities. So today’s guide also addresses prevention and responses to all types of financial exploitation and scams, not just mistreatment by people who are handling a resident’s personal finances. Predators can still reach residents through phone calls, the mail, or the computer. The guide offers facility staff some warning signs of what to look out for, such as scams that involve relatives in need, charity appeals, free lunches, free trips, or drug plans. Common scams can take advantage of an older person’s loss of memory, for example, and demand a bogus payment for something. Staff should also look out for residents receiving a lot of mail or email for sweepstakes, contests, or other sources, indicating that they may have already been conned.
The CFPB’s Office for Older Americans has already released several guides aimed at preventing financial exploitation. The Managing Someone Else’s Money guide helps financial caregivers protect their loved ones from financial abuse and scams. enlists service providers, financial institutions, and others in the fight against financial abuse through a train-the-trainer approach.
More information can be found at: consumerfinance.gov/older-americans/
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.