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Protecting Our Senior Citizens from Financial Abuse
By all accounts, elder financial abuse appears to be a multi-billion-dollar problem. A 2011 New York State study found that, for every documented case of elder financial exploitation, more than 43 other cases went unreported. A 2015 report from True Link Financial estimates that nearly $17 billion is lost to financial exploitation, defined as the use of misleading or confusing language, often in conjunction with social pressure and tactics, to obtain a senior’s consent to take his or her money. According to the same report, another $6.7 billion is lost to caregiver abuse, which is deceit or theft by someone who has a trusting relationship with the victim, such as a family member, paid caregiver, attorney, or financial manager.
Over the last several months, Risk Forum members have had several conversations with boards and members of different regional payment associations. The topic of elder financial abuse and exploitation came up often. It has been over seven years since Take On Payments last explored the topic, so we are overdue for a post on the subject given both the interest from some of our constituents and new legislation around elder financial abuse recently signed into law.
With an aging baby boomer population representing the fasting growing segment of the population, awareness of the magnitude of elder financial abuse and an understanding of ways to identify and prevent it are critical to the well-being of our senior citizens. And that is exactly the intent of the Senior SAFE Act that on May 24 was passed by Congress and signed into law under Section 303 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Briefly, the act extends immunity from liability to certain individuals employed at financial institutions (and other covered entities) who, in good faith and with reasonable care, disclose the suspected exploitation of a senior citizen to a regulatory or law enforcement agency. The employing financial institutions are also immune from liability with respect to disclosures that these employees make. Before they were afforded immunity, banks and other financial-related institutions had privacy-violation concerns over disclosing financial information to other authorities. The new immunities are contingent on the financial institution developing and conducting employee training related to suspected financial exploitation of a senior citizen. The act also includes guidance regarding the content, timing, and record-keeping requirements of the training.
Massive underreporting of elder financial abuse and exploitation makes it difficult to estimate the amount of money lost. While the law does not require financial institutions to report suspected financial abuse and exploitation, it definitely encourages them to create employee educational programs by offering immunity. And those who know the Risk Forum well know that we are strong advocates of education. Elder financial abuse is a growing problem that must be tackled. How is this law changing your approach to reporting suspected cases of elder financial abuse and related employee education?
By Douglas A. King, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed