Financial crime, sometimes referred to as Financial Abuse or Financial Exploitation, is a growing epidemic in the United States, posing a threat to both individuals and society. Understanding of the scope of problem has been hampered by a lack of valid statistics although progress is being made in ascertaining the extent of the problem. Although people of all ages are vulnerable, elders are often targeted by predators and experience greater losses than younger victims. 

Financial crimes and exploitation may be committed family members, acquaintances, predators, and professionals and takes many forms, including: 
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  • Theft: Taking someone's assets, include cash, valuables, medications, other personal property, without the person knowing or consenting. It may involve using powers of attorney, trusts, or other legal instruments to trick, coerce, or unduly influence victims into surrendering assets or property. 
  •  ​Fraud: Acts of dishonesty by persons entrusted to manage assets, who instead appropriate assets for unintended uses; may include falsification of records, forgeries, unauthorized check-writing, and Ponzi-type financial schemes.
Scams include:
  • ​Real Estate: Involves unauthorized sales, transfers or changes to property title(s); may include unauthorized or invalid changes to estate documents.
  • Contractor: includes building contractors or handymen who receive payment(s) for building repairs, but fail to initiate or complete project; may include invalid liens by contractors.
  • Lottery: involves payments (or transfer of funds) to collect unclaimed property or “prizes” from lotteries or sweepstakes.
  • Electronic: includes “phishing” e-mail messages to trick persons into unwittingly surrendering bank passwords; may include faxes, wire transfers, telephonic communications.
  • Mortgage: includes financial products which are unaffordable or out-of-compliance with regulatory requirements; may include loans issued against property by unauthorized parties.
  • Investment: includes investments made without knowledge or consent; may include high-fee funds (front or back-loaded) or excessive trading activity to generate commissions for financial advisors. 
  • Insurance: involves sales of inappropriate products, such as a thirty-year annuity for a very elderly person; may include unauthorized trading of life insurance policies
  • ​Predatory Lending: The use of lending practices that are unfair or abusive, such as convincing borrowers to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions. Common forms that target elder older adults include home equity loans and "payday loans"  (see "Under the Radar" for developments in "payday loans"" that are overpriced or that borrowers don't need or can't afford. 
  • ​Mass-Marketing Fraud: The Department of Justice defines "mass-marketing fraud" as any fraud scheme that uses one or more mass-communication methods – such as the Internet, telephones, the mail, or in-person meetings – to fraudulently solicit or transact with numerous prospective victims or to transfer fraud proceeds to financial institutions or others connected with the scheme. Schemes generally fall into two categories: (1) schemes that defraud numerous victims out of comparatively small amounts, such as several hundred dollars, per victim; and (2) schemes that defraud comparatively less numerous victims out of large amounts, such as thousands or millions of dollars per victim.
  • Money Muling: A type of money laundering in which a person receives money from a third party into their bank account and transfers it to another one or takes it out in cash and gives it to someone else, obtaining a commission for it. Even if money mules are not directly involved in the crimes that generate the money (e.g. on-line fraud, drugs, human trafficking), or aware of what is happening, they are accomplices and may therefore be criminally liable. 

Reports
  • Nearly 500,000 people reported this fraud to enforcement agencies in the U.S. and Canada over the last three years.
  • Reported losses in 2017 alone totaled $117 million.
  • Two-thirds of lottery and sweepstakes fraud victims are over age 60, and three-fourths of the money lost in scams that goes to Jamaica is from people over 70.  
  • ​Recommendations and Report for Financial Institutions on Preventing and Responding to Elder Financial Exploitation. (2016). Report by the Consumer Financial Protection Bureau’s Office for Older Americans that highlights best practices to assist banks and credit unions with their efforts to prevent elder financial abuse and intervene effectively when it occurs.​
  • “Federal Government Has Taken Some Steps but Could Do More to Combat Elder Financial Exploitation”  (2013, May) (Publication No.GAO-13-626T). This report indicated that “Older adults are being financially exploited by strangers” Financial exploitation includes mail, telephone, or Internet scams; unscrupulous financial services professionals; and untrustworthy in-home caregivers. The General Accounting Office (GAO) visited local law enforcement authorities in the four states and found that these states were investigating and prosecuting the a growing number of cases involving interstate and international mass marketing fraud.” The GAO has identified “several ways the federal government is, or could be, supporting state and local efforts to combat elder financial exploitation.” U.S. Government Accountability Office.
  • ELDER JUSTICE: National Strategy Needed to Effectively Combat Elder Financial Exploitation” (2012, November). (Publication No. GAO-13-110). To write this report the GAO interviewed state and local social service, criminal justice, and consumer protection officials in four states with large elderly populations. The GAO found the need for more safeguards and public awareness activities. U.S. Government Accountability Office. 

Legislation

  • Senior Safe Act Intended to provide immunity from prosecution for financial institution employees and financial institutions for having disclosed the suspected exploitation of a senior citizen, this bill was signed into law on May 24th, 2018). 

Resources

  • Model Civil Provisions on Elder Financial Exploitation was produced by the National Center for Victims of Crime, in collaboration with the American Bar Association and with support from the Huguette Clark Family Fund for Protection of Elders. “Elder financial exploitation is insidious and pervasive and has serious implications for its victims’ financial, emotional, and physical well-being. Although exact statistics are unknown, it is widely agreed upon by experts in the field that elder financial exploitation is underreported to investigatory agencies such as Adult Protective Services or law enforcement. Thus, it is also unlikely that victims pursue any civil remedies. This report discusses barriers to the civil justice system, and proposes some recommendations for overcoming some of those barriers.”
  • White Paper: Roundtable on Serving Victims of Elder Financial Exploitation was produced by the National Center for Victims of Crime with support from the Huguette Clark Family Fund for the Protection of Elders. During the Roundtable in November 2014, “Over thirty nationally-recognized experts in the field, including representatives of various government and law enforcement agencies, physicians, lawyers/judges, professors, financial services professionals, regulators, executive directors of national and local victim-oriented organizations, and policy analysts gathered in Washington, D.C. to address the gaps and to proffer concrete steps to help those affected by elder financial exploitation. The document generated “focused on 3 areas: 1) Direct Victim Services, 2) Public Policy, and 3) Justice System”; and generated five recommendations to help combat Elder Financial Exploitation. 
  • National Guidelines to Implement the 2013 Federal Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults was developed by the Philadelphia Corporation for Aging and the National Adult Protective Services Association with support from the Huguette Clark Family Fund for the Protection of Elders. This document provides APS workers with the information, documentation, and sample tools they need for requesting information from financial institutions in abuse investigations. 
  • The Baker Report is a comprehensive weekly update on current national and international scams and the efforts underway to stop them. The Baker Report is edited by Steve Baker, the former Director of the Federal Trade Commission’s Midwest Region.​
  • Resource on Money Mules. Europol has published a poster and a flyer, available in six languages, with tips on how to avoid becoming a money mule.
  • Pocket Guide on Elder Investment Fraud and Financial Exploitation. Checklist created by Baylor College of Medicine’s Texas Consortium for Geriatrics Education and Care for healthcare professionals and others that describes common red flags of financial exploitation, financial capacity, and the types of referral that may be needed.
  • Senior Abuse Financial Tracking and Accounting (SAFTA) Toolkit. Developed by the International Association of Chiefs of Police, the toolkit provides law enforcement and other elder justice professionals with a simple method for displaying suspicious financial patterns to facilitate the prosecution of suspected financial exploitation of older adults. 
  • Memorandum on Financial Institution and Law Enforcement Efforts to Combat Elder Financial Exploitation. Memo issued jointly by the Consumer Financial Protection Bureau, the Department of Treasury, and the Financial Crimes Enforcement Network (FinCEN) on August 30, 2017 describing how Suspicious Activity Reports can aid law enforcement investigations of elder financial exploitation cases and encouraging coordination among law enforcement agencies, financial institutions, and adult protective service agencies.
  • Elder Financial Exploitation Guide for States. Template developed by the National Center on Law & Elder Rights (NCLER) that can be customized to include state-specific laws and procedures.

Promising Practices

  • Sussex Victim Support Program. This program in Sussex England assigns Victim Support case workers in the Sussex Police to work with vulnerable victims who have been systematically targeted by criminals. Workers help victims with tasks like contacting creditors to take control of her finances and also to seek help through Citizens’ Advice.

​‘It was like a drug addiction’... Widow’s warning after losing £100,000 in ‘romance fraud’
  • National Asian Pacific Center on Aging-Asian American and Pacific Islanders (AAPI) Financial Exploitation Series. These two fact sheets: (1) Identifying Financial Exploitation and (2) Planning to Protect Yourself from Financial Exploitation are available in English, Chinese, Vietnamese, Korean, Tagalog, and Samoan. The Guidelines for Professionals are intended to (1) provide instructions on utilizing the in-language fact sheets developed within this series, and (2) highlight best practices for professionals when working with AAPI older adults who may be a victim of, or vulnerable to, financial exploitation.
​​‘It was like a drug addiction’... Widow’s warning after losing £100,000 in ‘romance fraud’
  • The San Francisco Veterans Benefits Protection Project. The VBPR is a coalition of organizations that fight pension poaching scams targeting older veterans. The VBPR is led by the Institute on Aging's Senior Abuse Prevention Program with funding by the San Francisco Department of Aging and Adult Services. Among the group's accomplishments is a tool that was developed for service providers who work with older veterans to use to detect scams in their early stages and identify trends, including geographic areas where veterans are being targeted and scammers who have committed multiple offenses. It further provides guidance in reporting scams to the Department of Insurance, Attorney General's office, and district attorney's offices his form of elder financial abuse threatens the health, safety, and financial freedom of thousands of elder veterans across the country.
  • Measuring Financial Abuse in the National Crime Victimization Survey. To address the need to quantify elder financial abuse, the Financial Fraud Research Center at the Stanford Center on Longevity and the FINRA Investor Education Foundation collaborated to develop a standardized fraud classification scheme that was used in developing survey questions to be administered as a supplement to the Bureau of Justice Statistics’ (BJS) National Crime Victimization Survey (NCVS).

In the News

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