Network combats elder financial abuse

PRESS DEMOCRAT: Why is financial fraud targeting senior citizens a growing problem?

DUANE: The crime of elder financial abuse is growing dramatically, and there are three primary reasons. One is the fact that a huge number of baby boomers are reaching retirement age; two, they are retiring with significant assets; and three, we are living much longer and can become quite fragile and dependent on support as we age, in order to remain at home in our later years.

This combination can result in a great deal of vulnerability if the elder becomes mentally incapacitated, requires home health care, or needs assistance with the management of his or her finances. This demographic phenomenon is increasingly proving to be a potential recipe for financial disaster for our elder community members. The new wave of elders is creating a burgeoning market for financial predators.

PRESS DEMOCRAT: Can you share some examples of different scams?

DUANE: Elder financial abuse is most frequently perpetrated by family members, caregivers and persons known to the elder. There also are many scams and frauds that target elders.

A common example is the sweepstakes or foreign lottery scam. In these cases, the elder is contacted by phone or mail and convinced that they have won a large sum of money. They are told that they must pay taxes or fees upfront and are sometimes told they must adhere to a privacy policy and keep the winnings a secret until the transaction is complete. Many elders have fallen prey to this scam and have been robbed of their entire life savings in a matter of days or weeks.

Other common scenarios include unlicensed (or licensed) contractor fraud and scams, automotive repair fraud and numerous consumer scams that specifically target older persons.

PRESS DEMOCRAT: What are possible signs of financial abuse of seniors?

DUANE: The misuse of powers of attorney by a person the elder trusts is very common. We train financial institutions to watch for sudden changes concerning financial transactions, such as frequent or large withdrawals.

The elder may appear nervous or afraid of the person with them, who may also express an unusual interest in the elder's finances or who may act domineering toward the elder. Or, elders who close long-term accounts that result in penalty assessments. Elders who are secretive about unusual financial transactions, or who are excited about a windfall. Elders who have become isolated by a family member or caregiver, or are being neglected despite apparently having the funds to provide for their care. Failure by family members or others to pay for care but who appear to be living off the elder. These are just a few of the warning signs.

PRESS DEMOCRAT: Why are seniors often reluctant to report such a crime?

DUANE: The main reason why elders do not report abuse or financial exploitation is feelings of shame and embarrassment.

Another is fear of loss of independence or being placed in a care facility. The victim may be dependent on the abuser for care or chores in order to remain at home. The abuser may be a family member who is dependent on the victim for support due to drug, alcohol, gambling or employment problems. The elder victim may have fallen prey to the lies and manipulations of another person such as in a sweetheart scam - having been romanced by a younger person who is interested only in stealing the elder's money.

This example is particularly cruel. An elder victim compromised by Alzheimer's or another form of dementia may not be aware of the abuse or be able to articulate what is happening to them.

PRESS DEMOCRAT: When did elder financial fraud first begin to be recognized?

DUANE: The mid-1980s marked the beginning of the movement to recognize and respond to the emerging crime of elder abuse including financial abuse and exploitation.

This effort accelerated in the late 1990s when legislation was passed in California to expand the capacity of Adult Protective Services to respond to all types of elder abuse, including financial. In the late 1990s, financial institutions were identified as a "front line of defense" for recognizing and reporting suspected financial abuse.

In the early years of this decade, many financial institutions began a voluntary movement to recognize their potential role in preventing devastating financial losses to their elder customers.

Locally, several banks stepped up by initiating the development of staff training and community awareness programs and established relationships with local APS and law enforcement to address this growing crime.

As of Jan. 1, all California financial institutions became mandatory reporters of suspected elder financial abuse when the Financial Elder Abuse Reporting Act was passed by the Legislature.

PRESS DEMOCRAT: What is the Elder Financial Protection Network?

DUANE: The Elder Financial Protection Network was established in 2000 with the support of a retired Marin County judge who recognized elder financial abuse as a growing problem that needed a coordinated local response including financial institutions.

We work to prevent financial abuse of elders through partnerships that build public awareness, drive community outreach and provide professional training. We do not investigate cases of alleged abuse. This is the job of APS, law enforcement and the county ombudsman. We do provide referrals and occasional assistance to persons who need resources or who are reluctant to report for any number of reasons.

PRESS DEMOCRAT: How do financial institutions typically attempt to prevent financial abuse?

DUANE: Financial institutions are implementing training programs for their staff and following new protocols for reporting suspected abuse. Financial institutions such as Bank of the West and Redwood Credit Union partner with us and local social service agencies to fund community education events that arm elders with tips to prevent and report financial abuse.

EFPN has been on the cutting edge of the development of award-winning training materials for financial institutions. In addition, local financial institutions are increasingly developing relationships with local APS and law enforcement, which is a critical component to fighting this growing crime and making our communities safer for older residents.

PRESS DEMOCRAT: A new law took effect in California this year making financial institutions and their employees legally responsible for reporting potential financial crimes against seniors. What must these institutions do?

DUANE: Under the Financial Elder Abuse Reporting Act, which took effect Jan. 1, employees of banks and credit unions are now required to report suspected financial abuse of elder customers or members to local Adult Protective Services or law enforcement. An immediate verbal report is required and is to be followed up by a written report within two working days. The state Department of Social Services has created a reporting form for financial institutions to assist them in filing the report. Failure to report can result in a $1,000 fine, or up to $5,000 for the institution. Unlike for other mandated reporters of elder or dependent adult abuse, there are no criminal sanctions against the financial institution employee for failure to report.

PRESS DEMOCRAT: How can seniors help themselves avoid becoming victims?

DUANE: Learn about frauds and scams and how to avoid them. Avoid solicitors of any kind - always seek out reputable services yourself - and ask your friends and neighbors for references. Be very careful whom you hire. Always interview and again, check several references. Ask a friend or family member to sit in on interviews with contractors, prospective care providers and others you may want to hire. Plan ahead for your financial needs but avoid those trust mills offering refreshments, free meals and low-cost "legal instruments." Never be rushed into a deal. Always shop around and get second opinions whenever possible.

Be very careful whom you choose as your power of attorney but do choose someone you trust before an emergency arises.

And most importantly, avoid isolation and look out for your neighbors - don't mind your own business! Early intervention results in loss prevention. Report suspected abuse of any kind to Adult Protective Services.