In Support Of Financial Institutions Collaboratively Addressing Suspected Financial Exploitation of Elders
Resolution 8 In Support of Financial Institutions Collaboratively Addressing Suspected Financial Exploitation of Elders
United States Census data project that by 2050, elders will comprise approximately 20% of the general U.S. population. Older adults, often possessing significant assets, may become increasingly vulnerable to financial exploitation by caregivers, scam artists, financial advisors, contractors, fiduciaries, and even family members.
Numerous surveys have documented a rise in elder abuse, neglect, and financial exploitation cases over the past decade, with expectations of further increases. Studies suggest that financial exploitation of elders has become a widespread problem, exacerbated by the growing physical and cognitive impairments associated with aging. Yet only a small fraction of such incidents are ever reported.
A 2009 study by the MetLife Mature Market Institute estimated that financial losses due to elder financial abuse may total $2.6 billion annually. Detecting and deterring financial exploitation in a timely manner is critical to prevent devastating and often permanent financial losses.
Financial institutions are uniquely positioned to help detect and prevent elder financial exploitation. They can play a key role by:
- Promptly reporting suspected financial exploitation, often facilitated through the misuse of powers of attorney, to adult protective services and law enforcement;
- Providing education and training for frontline employees to detect signs of elder financial exploitation;
- Delaying suspicious financial transactions for a limited time (e.g., five days) to allow good faith reporting and investigation.
Despite these opportunities, elder financial exploitation remains under-reported by banks, sometimes due to misconceptions about federal privacy laws that, in fact, permit reporting of suspected abuse.
Some financial institutions have already taken commendable steps by instituting employee training programs on elder financial exploitation. Recognizing the need for a more uniform and reliable approach, eight states and the District of Columbia have enacted laws requiring financial institutions to report suspected exploitation, offering protection through immunity provisions. Maryland, for example, mandates employee training, while Washington authorizes financial institutions to delay suspicious transactions.
NOW, THEREFORE, BE IT RESOLVED that the Conference of Chief Justices and the Conference of State Court Administrators:
- Recognize that effective steps are urgently needed to promote prompt detection and prevention of suspected elder financial exploitation, requiring collaboration among financial institutions, aging agencies, law enforcement, and other relevant stakeholders;
- Urge states, territories, and financial institutions to collaboratively promote and adopt effective practices, including prompt reporting, delayed suspicious transactions, and employee education and training to address the growing problem of elder financial exploitation.
Adopted as proposed by the CCJ/COSCA Elders and the Courts Committee at the COSCA 2015 Midyear Meeting on December 5, 2015, and at the CCJ 2016 Midyear Meeting on February 3, 2016.