The Abuse of Older Adults and Privacy

Guarding and preserving dignity, safety and finances of the elderly has become increasingly important as boomers and their parents reach the point where age and the accompanying limitations become issues requiring extra attention and effort. Why, you ask? Because more than 70% of the nation’s wealth is controlled by individuals over the age of 50. Many older adults do not realize the value the elderly. The financial abuse of elders may occur through fraud, promises of services, such as, never having to worry about money or a place to live. Caregivers gain the trust of the older adults and then tell tales of financial troubles or serious situations that could be solved with some extra money.

Many persons also troll the Internet looking for lonely individuals who may not have any remaining family and are looking for companionship. Recently, just such a case was uncovered. In this situation a man posing to be a former priest and who said that he traveled constantly selling books contacted an elderly lady through the Internet. They agreed to meet but when it came time the man called to say that he was delayed and would it be alright if he stopped by her home late that evening. The woman agreed and they began a relationship. The man convinced her that her co-workers wanted to take her house away and send her to a retirement home. Meanwhile the co-workers were noticing large bruises on her hands and arms and when they inquired as to the source of the bruises she would tell them that she had been clumsy. Less than a year later, the woman passed away and when her daughter inquired about her mother’s home and her other assets everything had been placed into the man’s name.

Individuals who prey on the elderly may be family members such as children, grandchildren, siblings or even a spouse. These family members may have problems with substance abuse, gambling or personal finances. The family members may fear that the older individual may get sick and use up all of ‘their’ inheritance or not trust the other family members. Still others who may defraud the elderly are dishonest professionals and business people who overcharge for their services or use their positions of trust to gain access to the elderly’s finances.

The Interagency guidance on Privacy and Reporting Financial Abuse of Older Adults was released September 24, 2013. The guidance addressed the general rule that banks and other financial institutions may not disclose personal, non-public information to a third party with out having provided the opportunity to opt-out. The guidance also points out exceptions to this general rule and that these exceptions may apply in situations of suspected financial abuse of the elderly without the authorization of the individual and not be in violation of the Gramm-Leach-Bliley Act (GLBA). The excep-

Many pressing issues face financial institutions in these ever changing days of regulation. Elder financial abuse may not be at the top of list; however, reviewing the interagency guidance would be useful in reminding bank staff of the potential threats that exist for the elderly.

tions include state or local government reporting requirements, response to a proper judicial investigation or other law enforcement or official investigatory process with the goal of the prevention of actual or potential fraud.

Some of the signs which may indicate financial abuse are:

Interactions to watch for are:

Many states’ laws offer protections of other at-risk adults and at-risk juveniles such as those who may not be able to walk, see, hear or speak, be developmentally disabled, or have a mental illness or impairment. Be certain that you and your company’s employees understand the warning signs

and what to do if questionable behavior is observed. The FDIC produced a user-friendly booklet to help older adults make informed decisions and protect their assets which can be found at the FDIC website.
While this article addresses exceptions to the GLBA rule regarding the parameters of sharing information, financial institutions need to be mindful of reporting suspicious activity related to potential elder abuse.
Many pressing issues face financial institutions in these ever changing days of regulation. Elder financial abuse may not be at the top of list; however, reviewing the interagency guidance would be useful in reminding bank staff of the potential threats that exist for the elderly.

Nanette Stanley, CRCM, is an experienced banker, consultant, and compliance officer. She possesses over 25 years of experience in financial institution regulatory compliance, BSA/AML, Money Service Businesses, training, and financial institution program reviews and regulator examinations.

Please wait...

Subscribe to our Technical Publication!

Want to be notified when Compass is published? Enter your email address and name below and sign up to our mailing list!
Please wait...

Download the PDF File