How to Recognize, Prevent, and Report Financial Exploitation of Vulnerable Elderly Adults

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This is an 18-minute edition of a more comprehensive multidisciplinary training intended to help financial professionals learn how to recognize, prevent and report financial exploitation of vulnerable seniors. The training also covers the roles of several key agencies involved in the protection of vulnerable adults, and important state and federal laws that relate to this topic. The focus is on seniors aged 60 and older, but much of the content is also applicable to vulnerable adults aged 18-59. You may also view the full version of the training.

Training Overview

New York State’s Social Services Law defines financial exploitation as the “improper use of an adult’s funds, property, and/or resources by another individual,” and authorizes adult protective services for vulnerable adults over the age of 18 who are “unable to protect themselves from abuse, neglect, financial exploitation, or other harm.”

The following topics are covered in greater detail in the full version of the training:

The economic impact of financial exploitation

As documented in the just-released New York State Cost of Financial Exploitation Study (2016, NYSOCFS) the financial loss to vulnerable elderly New Yorkers from financial exploitation is an estimated $1.5 billion a year.

Rise of APS financial exploitation caseloads in recent years

New York State has seen a 35 percent increase in financial exploitation referrals from 2011 to 2014, both for seniors and all ages. Of the APS referrals involving a suspected perpetrator, financial exploitation was the category with the highest percentage (37 percent).

Unreported APS financial exploitation cases

The rising number of reported cases is only the “tip of the iceberg.” Under the Radar: New York State Elder Abuse Prevalence Study, funded by NYS OCFS, estimates that for every financial exploitation case referred to APS, law enforcement or other government authorities, there are 44 other such cases that are not reported. Financial exploitation was found to be the most prevalent form of elder mistreatment reported, affecting 42 out of 1,000 older New Yorkers.

Types of financial exploitation

By someone the victim knows, e.g., family, friends, caregivers, fiduciaries such as agents under a power of attorney, guardians, etc.

By strangers, e.g., con artists claiming to represent a charity, lottery, sweepstakes or government agency; scammers; unscrupulous contractors or salespersons; identity theft; reverse mortgage fraud; insurance fraud and health care fraud.

The role of the NYS Department of Financial Services (DFS)

DFS combats elder financial abuse by:

• Working with financial institutions and the insurance industry on best practices for identifying and preventing abuse;
• Addressing consumer complaints through the Consumer Assistance Unit;
• Investigating and working with local law enforcement on criminal matters such as theft, forgery, etc., through the Criminal Investigations Unit;
• Investigations on civil matters through the Civil Investigations Unit;
• Educating consumers and the public;
• DFS Guidance For Financial Institutions on Preventing Elder Financial Exploitation, is issued to New York financial institutions to promote the reporting of suspected financial exploitation to APS and other authorities. This guidance includes red flags that can indicate financial exploitation and information about “safe harbors” permitting financial institutions to provide customer information to APS and other authorities to assist with investigations, and civil immunity for reporting to APS and other agencies.

The role of Adult Protective Services (APS)

APS investigates reports of abuse, neglect and financial exploitation of adults aged 18 and older who, because of physical or mental impairments, are unable to protect themselves from abuse, neglect, financial exploitation or other harm and have no one available who is willing and able to assist responsibly.

The training incudes details on how to contact APS investigators, how APS can help, APS’s duty to contact law enforcement where crime is suspected, actions APS may take when financial exploitation is confirmed, characteristics of typical victims of financial exploitation, and warning signs of questionable financial transactions, questionable customer demeanor and suspicious relationships.