On Thursday, March 18, 2021, The New York ACAMS Chapter hosted an event titled Identification and Prevention of Elder Abuse and Elder Financial Exploitation. The event was moderated by Tina Rampino (Associate Managing Director, K2 Integrity, and ACAMS New York Chapter Board Member) and included the following panelists: Liz Loewy (Co-founder and Chief Operating Officer, EverSafe); Dr. Veronica LoFaso (Associate Professor of Clinical Medicine, Weill Cornell Medical College); and Michael Schidlow (Financial Crime Compliance Advisory and Training Consultant).
Comprehensive material pertaining to the topics addressed during the event can be accessed here.
Only 1 in 44 cases of elder financial exploitation are reported. The panel stressed the important role of the financial community in helping to identify and report instances of suspected elder financial exploitation.
The panel also discussed the physiological changes of the aging brain that might make older adults especially vulnerable to scams. The audience learned the relationship between cognitive function and capacity and the importance of determining an individual’s decision-making ability, specifically understanding financial records and decisions.
Panelists reviewed case study examples highlighting red flags and explaining how the cases were ultimately prosecuted. Financial institutions should provide training and awareness programs to employees to reinforce the red flags related to Elder Financial Exploitation and understand their responsibility for reporting. The panel encouraged financial institutions to report Elder Financial Exploitation directly to Adult Protective Services (APS) and to develop a dialogue in order to share information related to this issue.
Financial Institutions should enhance their transaction monitoring programs to improve detection of Elder Financial Exploitation so that cases are reported in a timely manner or consider working with fintechs to do so The panel suggested identifying key employees who focus only on reviewing potential cases of Elder Abuse. Financial Institution policies and procedures should also incorporate processes for identifying and reporting Elder Financial Exploitation in SARs and also externally to APS.
If you suspect Elder Financial Exploitation in your institution, contact APS at Adult Protective Services (APS) | OCFS (ny.gov).
The following key takeaways were provided by the panelists:
Financial institutions face significant challenges in addressing the growing threat of elder financial abuse. They include a plethora of cases involving family members and fiduciaries, lack of access to customer data across accounts and institutions, issues related to diminished capacity, and privacy regulations that preclude the sharing of fraud alerts with trusted contacts. Innovative solutions, including technology tools, can enable banks and firms to protect at-risk clients and identify more cases.
Older adults often have multiple medical and emotional challenges that may make them dependent on others and especially vulnerable to financial abuse. There are physiological changes that occur in the brains of some older adults who are otherwise cognitively intact, that affect their ability to reason logically when faced with a scam. Cognitive function is not the same as decisional ability. One may have impaired cognition and still have the ability to make decisions about some situations they are facing. Having decisional ability means an individual can understand the complexities of a situation where they may be at risk, appreciate that they personally are experiencing this risk and have the ability to reason through the pros and cons of a decision they are making with respect to the risk (i.e accepting an intervention to mitigate the risk).
Understand that Elder Financial Exploitation takes a “victimological” approach, and financial institutions should tailor their controls around that. Red flags for financial institutions include:
“Deviation from Profile” – Elders and other at-risk customers tend to have more predictable spending habits (cost of living, checks, limited cash W/D etc.). Monitoring could be tailored to look for increase in volume and/or value of spending that might suggest abuse.
New Products and Services – Elders and at-risk customers are potentially the least likely customer segment to proactively request new products/services, or upgrades to existing products (i.e., platinum debit cards). Be conscientious that changes to products and services, or changes to existing products (ex., change to debit PIN) are a trigger event.
All Channels – Elder Financial Exploitation is detectable through customer-facing, telephone, and other channels within the bank; training should be tailored to those channels to enhance escalation.
Pandemic – The duration and isolation of the pandemic has exacerbated the conditions of Elder Financial Exploitation. Banks should remain on high alert in particular, regarding sudden, unexplained changes in transaction volume and value. ****
Free Training Opportunity Education and awareness of elder financial exploitation indicators is integral to the development of effective prevention and reporting structures. The NYC Elder Abuse Center/Weill Cornell Medicine provides free training on elder abuse and financial exploitation to financial professionals. For a staff training please contact Paulette Cunningham, Training Coordinator, NYC Elder Abuse Center: firstname.lastname@example.org