The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury, has issued an advisory aiming to alert financial institutions of a rising trend of elder financial exploitation (EFE). EFE involves “the illegal or improper use of an older adult’s funds, property, or assets, and is often perpetrated either through theft or scams,” FinCEN says.
In 2021, U.S. financial institutions filed 72,000 suspicious activity reports (SARs) related to EFE, marking a rise of 10,000 filings over the prior year. Concurrently, the Consumer Financial Protection Bureau (CFPB) also estimated that the dollar value of such suspicious instances has risen from $2.6 billion in 2019 to $3.4 billion in 2020, the largest such increase since 2013 according to FinCEN.
“Older adults should not have to endure abuse by criminals who seek to defraud them of their lifelong savings, or who wish to lure them into scams or schemes under false pretenses,” said FinCEN Acting Director Himamauli Das. “Financial institutions serve on the frontlines in protecting their older customers’ finances, and can play a critical role in helping to identify, prevent, and report suspected elder financial exploitation. Financial institutions’ vigilance [and] reporting matters.”
The final advisory provides a proverbial laundry list of the types of scams that may target older Americans, as well as specific behavioral and financial “red flags” which could help to indicate that a certain transaction, product or arrangement is illegitimate.
“In line with the risk-based approach to compliance with the Bank Secrecy Act, financial institutions should perform additional due diligence where appropriate and remain alert to any suspicious activity that could indicate that their customers are perpetrators, facilitators, or victims of EFE,” FinCEN explains.
Earlier this year, the HUD OIG issued a new fraud bulletin aimed at informing the public about reverse mortgage scams, a revision to a previous bulletin that noted increased interest in the product category due to the ongoing economic impacts of the COVID-19 coronavirus pandemic.
That bulletin describes for people that reverse mortgages are legitimate products offered under the FHA’s HECM program, but that certain bad actors may seek to scam a senior out of money under the guise of offering a reverse mortgage on their home.
Those who may know a victim or potential victim of elder financial abuse are encouraged to report the incident to a local office of Adult Protective Services (APS), which can be found through the organization’s website. Scams or fraud should be reported to the Federal Trade Commission (FTC) using that agency’s complaint form.
Read the FinCEN bulletin.
