Berge & Berge, LLP Blog

Sunday, April 17, 2016

Protecting Seniors from Financial Abuse

Seniors are increasingly becoming the target of financial scams for a variety of reasons. While many older adults may have accumulated significant assets, even those with low or fixed incomes are vulnerable to financial exploitation. Financial abuse often comes at the hands of an older individual's family members whether adult children, grandchildren, other relatives, and caretakers.

At the same time, there a number of scams in which strangers prey on seniors. The most common scam involves bogus telemarketing calls aimed at obtaining personal information. Seniors are said to be more familiar with shopping over the phone and unaware of the risk. There have also been a number of investment schemes that depleted the savings of older adults.

Reasons for Financial Exploitation of Seniors

Seniors are more susceptible to financial abuse because they often have accumulated significant assets or equity in their homes. Older adults are also more likely to have Social Security benefits and, in addition, may be drawing income from some type of retirement account or pension. More sadly, seniors are often isolated and suffering from mental and physical ailments which make them more vulnerable to financial predators. Financial exploitation is the most common form of elder abuse, resulting in losses of billions of dollars every year.

The Consumer Protection Financial Bureau

In response to calls to protect seniors from financial exploitation, the Consumer Financial Protection Bureau (CFPB) recently issued an advisory on the role that banks, credit unions and other financial institutions can play in preventing and responding to the financial abuse of older Americans.

The CFPB was created by the Dodd-Frank reform measure that President Obama signed into law during his first term in office. The agency believes that banks and credit unions have the capacity to protect older consumers because they are likely to have accounts at these institutions and have interactions with tellers and bank personnel. The CFPB also contends financial institutions have the ability to detect when a senior's account has been the target of a scam.

“When seniors fall prey to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to report it," said CFPB Director Richard Cordray. "Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”

The bureau has made a number of recommendations for ways in which financial institutions can protect seniors from financial exploitation. First, banks and credit unions should train staff to detect abuse and implement appropriate responses to suspicious activity. The agency also believes that financial institutions should report this activity to state and federal authorities and implement other internal safeguards to prevent financial abuse.  This is only the first step in combating this growing financial crime. In the meantime, if you or a loved one has been the target of a financial scam you should engage the services of an elder law attorney to protect your interests.

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