Compliance Update with Amy K

​Holidays are upon us – a good time to increase awareness of elder financial abuse. Plus, multiple resources to educate your staff and members. 

by Amy Kleinschmit, Chief Compliance Officer

Preventing Elder Financial Abuse
With Thanksgiving and the holiday season right around the corner, it is unfortunately also a time when elder financial abuse may increase.

The Consumer Financial Protection Bureau’s (CFPB) Combatting Elder Financial Exploitation Webinar Series in Fall 2023 recently wrapped up. Webinar slides and recordings from the Fall 2023 series are available at the links below:

• Get to Know Your Federal Financial Regulators | September 7, 2023: Recording 
• Just-in-Time Housing Guides | September 14, 2023: Recording
• Reporting and Investigating Elder Financial Exploitation | October 12, 2023: Recording

Another newly available webinar recording from the CFPB includes Protecting Elders in Native Communities from Financial Exploitation.

The Financial Crimes Enforcement Network (FinCEN) has previously issued advisories on elder financial exploitation (EFE). FinCEN Advisory, FIN-2022-A002, can be found here.

As discussed in the advisory – “According to the U.S. Department of Justice, elder abuse, which includes EFE among other forms of abuse, affects at least 10 percent of older adults each year in the United States, with millions of older adults losing more than $3 billion to financial fraud annually as of 2019. Despite the fact that EFE is the most common form of elder abuse, the majority of incidents go unidentified and unreported as victims may choose not to come forward out of fear, embarrassment, or lack of resources.”

Credit unions, and other financial institutions, are uniquely situated to detect possible financial exploitation through their relationships with older customers. They therefore play a critical role in helping to identify, prevent, and report EFE to law enforcement and their state-based Adult Protective Services.

The advisory discusses trends of EFE. Elder theft is generally perpetrated by known and trusted individuals of the older adult. Scams - which can disproportionally affect older adults, frequently involve fraudsters, often located outside of the United States, with no known relationship to their victims. Victims of elder financial exploitation are often re-victimized.

Be sure to read and review the advisory in its entirety with staff as it discusses common elder scam typologies and behavioral and financial red flags, a few of these red flags include:

• An older customer with known physical, emotional, and cognitive impairment has unexplainable or unusual account activity.
• An older customer appears distressed, submissive, fearful, anxious to follow others’ directions related to their financial accounts, or unable to answer basic questions about account activity.
• During a transaction, an older customer appears to be taking direction from someone with whom they are speaking on a cell phone, and the older customer seems nervous, leery, or unwilling to hang up.
• An older customer is agitated or frenzied about the need to send money immediately in the face of a purported emergency of a loved one, but the money would be sent to the account of a seemingly unconnected third-party business or individual.
• Dormant accounts with large balances begin to show constant withdrawals.
• An older customer purchases large numbers of gift cards or prepaid access cards.
• An older customer sends multiple checks or wire transfers with descriptors in the memo line such as “tech support services,” “winnings,” or “taxes.”
• An older customer receives and transfers money interstate or abroad to recipients with whom they have no in-person relationship, and the explanation seems suspicious or indicative of a scam or money mule scheme.
• Debit transactions that are inconsistent for the older customer.
• Uncharacteristic attempts to wire large sums of money.

Specific SAR filing instruction - FinCEN requests that financial institutions reference the advisory by including “EFE FIN-2022-A002” in SAR field 2 (“Filing Institution Note to FinCEN”), and mark the check box for elder financial exploitation.

In addition to filing a SAR, FinCEN recommends that financial institutions refer their older customers who may be victims of EFE to the Department of Justice’s National Elder Fraud Hotline at 833-FRAUD-11 or 833-372-8311 for assistance with reporting suspected fraud to the appropriate government agencies.  For educational resources on EFE and scams targeting older adults, please see the CFPB’s Office for Older Americans.

The Department of Justice has an interactive tool for elders who have been financially exploited to help determine to which agency they should report their incident, and also a senior scam alert website. The senior scam alert website has a number of scams to warn and educate the public about trending elder fraud threats – this is good information to help educate members about the potential scams that are occurring.

In March 2016, the Consumer Financial Protection Bureau (CFPB) issued “Recommendations and report for Financial Institutions on preventing and responding to elder financial exploitation,” which can be found here. In this report, the CFPB found that, “Elder financial exploitation has been called the crime of the 21st century and deploying effective interventions has never been more important. Older people are attractive targets because they often have assets and regular income. These consumers may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, or bereavement. Elder financial exploitation robs victims of their resources, dignity and quality of life—and they may never recover from it.”

The accompanying Advisory to this 2016 report, which can be found here, contained recommendations for credit union to help prevent and respond quickly to elder abuse exploitation. Remember – credit unions play a vital role in preventing and responding to this type of elder abuse as you are uniquely positioned to detect that an elder account holder has been targeted or victimized, and to take action.

The CFPB makes the following recommendations that credit unions can take to protect your aging members:

• Develop, implement and maintain internal protocols and procedures for protecting account holders from elder financial exploitation.

• Train management and staff to prevent, detect, and respond to elder financial exploitation – (mark your calendar for free upcoming training from CUAD – discussed below)
• Detect elder financial exploitation by harnessing technology.
• Report all cases of suspected exploitation to relevant federal, state and local authorities.
• Protect older account holders.
• Collaborate with other stakeholders.

These recommendations are discussed in more detail in the CFPB Advisory and Report at the above links – be sure to review so you can help protect your members this holiday season, and year round.

Trusted Contact Resources
As discussed previously, the National Credit Union Administration (NCUA) provided information in a consumer tip – protect your money with a trusted contact. A short video, aimed at educating members, can be found here.

As discussed in the consumer tip, choosing a trusted contact can help the member prevent fraud and scams without giving up control of their finances.

In addition to the Trusted Contact tip, the NCUA has a number of other resources available to help protect older adults, which can be found here. NCUA has also provided guidance for credit unions on how they can help fight elder financial exploitation, considering sharing the poster found at the previous link with all staff.

CU PolicyPro (a dues supported resource available for all affiliated credit unions) addresses this topic in updated Policy 2245 to include Trusted Contact Person Information. Also, new content was added with the new Trusted Contact Person Procedures (2245.10), Trusted Contact Person Model Script (2245.11), and Trusted Contact Information and Authorization Form.

In addition to the CU PolicyPro updates, a Trusted Contact Person Toolkit has been added to InfoSight and is available free of charge for affiliated credit unions. Credit unions can read more about this collaborative initiative and the availability of these resources here.

More resources for credit unions –
Protecting older adults from fraud and financial exploitation -  Find FREE guides and information material, including: “Money Smart for Older Adults;” consumer advisories on preventing fraud; placemats that can be provided which include tips to avoid common financial scams.

Mycreditunion.gov – includes resources for preventing elder financial abuse.
South Dakota resources – https://dhs.sd.gov/ltss/adultprotective.aspx
North Dakota resources - https://www.nd.gov/dhs/services/adultsaging/vulnerable.html

Elder Financial Exploitation Training
FREE training is available from AARP’s BankSafe training which combines industry knowledge and experience with a state-of-the-art, online learning experience. AARP worked with more than 2,000 financial industry professionals to develop the training platform’s content and interactive scenarios. The platform is one of few designed specifically for frontline staff, supervisors and compliance officers. Find the platform here.

​After training there are also a number of tools and support resources - AARP BankSafe updates and maintains a network of tip sheets, reference materials, and state-specific resources.