Director Cordray on Money Smart for Older Adults

Prepared remarks of Richard Cordray
Director of the Consumer Financial Protection Bureau
Money Smart for Older Adults press call
Washington, DC
June 12, 2013

Thank you for joining us on this call today. We are pleased to announce the launch of a new financial education resource to help older people and their families prevent the growing crime of elder financial exploitation. Together with the FDIC, we are releasing Money Smart for Older Adults, a program to raise the awareness of older Americans and their caregivers about how to prevent, identify, and respond to elder financial exploitation.

With this work, we are building together on the FDIC’s outstanding Money Smart curriculum for financial education, which is the best work of its kind that I have seen in this country. I first came across Money Smart as a local official in Ohio, where we enthusiastically spread it to teachers in the surrounding schools. Now today, we are extending this approach with specialized guidance to an entirely new population of seniors. Notably, this information will also be very helpful to the “caretaker generation” of people like myself, who are looking out for an aging parent (my dad is now 95).

Older people are often the specific targets of unfair, deceptive and abusive financial practices. According to one study, older Americans lost at least $2.9 billion to financial exploitation in 2010, and it is estimated that for each case that is reported, 43 others go unrecognized. With 50 million older people in this country, and 10,000 more reaching retirement age every day, we cannot afford to tolerate financial predators or practices that victimize our elder citizens.

Many seniors have routines, and their predictable patterns make them easier targets for predators including family members and others in a position of trust. They can be lonely or overly trusting, and we now have many methods by which perfect strangers can communicate with them, often anonymously or posing as someone they are not. Seniors may be dependent on hired caregivers who may gain access to their finances. Abusers often assume that the victim will be too embarrassed or is too vulnerable or dependent on them to report the exploitation or pursue legal action, and unfortunately that assumption is all too often correct.

I know from my own experience as Ohio Attorney General that scams targeting older adults can be vicious – a fake foreign lottery, a caller falsely claiming a grandchild is in serious trouble and needs money, or a contractor who overcharges an elderly homeowner. With Money Smart for Older Adults, we will provide information on the most common frauds and scams. We want to educate, engage, and empower consumers on these issues and make sure that older consumers and their family members receive the information they need in order to avoid being victimized and to make the best financial decisions for themselves and their families.

It is important that seniors and those around them – financial professionals, service agencies, caregivers, family members, and friends – know how to identify and report common signs of elder financial exploitation. Sometimes the indicators are obvious: funds disappearing from accounts, bills that go unpaid, belongings that are missing. Sometimes they are more subtle, such as electronic or ATM withdrawals that fly under the radar or a new friend or acquaintance showing up with power of attorney or being added on a joint account.

We want to see older adults plan ahead in case they lose their capacity to make financial decisions. They should discuss arrangements with family members they trust. Many seniors and their caregivers turn to financial experts for guidance. In April, we announced the results of a study we conducted on how consumers can identify and verify a financial adviser’s credentials or “senior designations.” We found that a bewildering array of titles and acronyms often confuse and mislead seniors and their caregivers.

It is essential that we come together as a nation to protect our seniors and the money they have scraped together over a lifetime of hard work. Today’s launch will help dispel confusion about a variety of financial matters and will help protect seniors against scams, frauds, and other abuses. Money Smart for Older Adults represents an effective way to engage older consumers and those who look out for them and care for them.

I would like to thank Chairman Gruenberg for his leadership on this issue as well and for his shared dedication to financial education. Again, it gives me a special feeling now to have a hand in helping augment the Money Smart curriculum for financial education that I have admired and advocated for more than a decade. I look forward to working with him and others to ensure that our seniors – and all Americans – are well protected in the financial marketplace.

Thank you.