What is Financial Exploitation?
Financial exploitation is a type of abuse that occurs in adults aged 60 and older. Financial exploitation includes the misuse, mishandling, or exploitation of property, possessions, or assets of adults. This also includes using another’s assets without consent, under false pretense, or through coercion and/or manipulation.
Examples of financial exploitation include someone cashing an older adult's check without permission or authorization, someone forging the older adult's signature on a financial document, as well as friends or family members frequently borrowing money and not repaying the older adult.
How to Spot Financial Exploitation
If you work in the financial sector, there are specific warning signs that may indicate an older customer may be the victim of financial exploitation. These include the following warning signs:
Financial Activity Inconsistent with Usual Patterns
- Withdrawal activity:
- Large cash withdrawals
- Increased frequency of withdrawals
- Increased request for bank checks
- Increased use of ATMs, especially when little or no use previously
- Third party involvement:
- Adding co-signer to accounts
- Unusual interest by 3rd party
- Insists on handling customer's financial affairs
- 'New friend' assisting
- Customer concerns:
- Increased confusion
- Lack of knowledge of accounts
- Frequent visits to clarify issues
- Not receiving statements
- Implausible explanations
The following interactions are also considered questionable, and may be a sign that financial exploitation is taking place:
- Inappropriate influence by third party:
- Using fear, threats, or intimidation
- Helping customer to physically sign documents
- Verbal threats or suggestions
- Non-verbal facial expressions or body language that appear threatening
Connecting Cognitive Impairment to Financial Exploitation
Professionals in the financial sector should know the difference between an older adult who is aging normally, versus an older adult who is aging with cognitive impairment, such as Alzheimer’s or Dementia. Adults with cognitive impairment are at a higher risk of financial exploitation.
If you have a customer who may being living with cognitive impairment, financial institutions should take note of this change and keep a closer eye on this customer, as they will need additional support to keep their finances safe.
How to Report Abuse
If you suspect one of your customers may be the victim of financial exploitation, report the suspected by phone at (800) 922-2275 or online anytime. Professionals in the financial sector can legally report suspected abuse without breaking customer confidentiality.
When reporting, the following information is helpful to include in your report, if the information is available:
- Amount of monies taken
- Amount of monies remaining and still at risk
- Any actions taken by financial institution to reduce risk
- Timeframes on such actions
- Any known, or potential, impact of exploitation
- Any other pertinent information such as safety concerns for older adult
Massachusetts law grants immunity from any charges resulting from a report of abuse, as long as the reporter did not commit the abuse. If you make a report in good faith, you have the same immunity, and your identity remains confidential.
Suspicious Activity Report (SAR)
A Suspicious Activity Report (SAR) is another tool that financial institutions can use to report financial abuse. SAR forms have a special category for “elder financial exploitation.” The Bank Secrecy Act (BSA) requires SAR filing when mandatory BSA requirements are present. You should consider voluntarily filing a SAR in cases of financial exploitation. The SAR filing should include problem resolution, such as whether you plan to report or have reported the abuse, and your institution's follow up steps.