Preventing Elder Investment Fraud

Every day, crimes involving elder investment fraud are taking place throughout the country. According to a recent Investor Protection Trust survey, more than 20% of Americans over the age of 65 have been the victim of a financial swindle. Sadly, many of these victims are taken advantage of by family members or trusted caregivers.

Fortunately, however, more is being done to protect the elderly from investment fraud and financial scams. In July 2011, the Consumer Financial Protection Bureau was founded as a result of the Dodd–Frank Wall Street Reform and Consumer Protection Act.

Shortly after its creation, the CFPB announced a public inquiry to learn more about the many ways in which older Americans are financially exploited and about the best practices for elder financial management.

The CFPB has since launched a number of initiatives designed to prevent, detect and address elder financial exploitation. One of these efforts has been to establish collaborations on the local, state and national levels and between the public and private sectors.

Last fall, the CFPB met with the Elder Justice Coordinating Council to learn from national experts on the issue of elder financial fraud. Among the themes to emerge from that meeting:

• Older Americans are victimized by a broad range of perpetrators.
• Collaboration is critical.
• Diminished capacity is the 800-pound gorilla in the room.
• We need more and better quality data.
• We need a broad-scale public education campaign to raise awareness of elder financial abuse and what to do about it.

To address the various issues flagged at the Council meeting, the CFPB is orchestrating several efforts. They include:

• Creating “how-to” guides for agents under powers of attorney, guardians, trustees, Social Security representative payees, and V-A fiduciaries.
• Developing a guide to help senior housing, assisted living, and skilled nursing facilities identify and intervene in exploitation cases.
• Creation of the “Our Money Smart for Older Adults” education program, in collaboration with the FDIC, to focus on preventing, recognizing, and reporting elder financial exploitation.
• Working in several states to create and sustain coalitions for community education, public awareness, enhanced response, and increased prosecution.
• Providing strategies for communicating to financial institutions that the Gramm-Leach-Bliley Act generally does not prohibit them from reporting suspected abuse to law enforcement and APS agencies.

Next blog: Detecting the “red flags” of elder investment fraud.