ELDER FINANCIAL ABUSE How to spot it How to stop it

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1 ELDER FINANCIAL ABUSE How to spot it How to stop it ELDER FINANCIAL EXPLOITATION Over 20 years working for CUNA and CU Leagues in compliance, government relations and state & federal advocacy Colleen Kelly Senior Federal Compliance Counsel Credit Union National Association Disclaimer Information provided in this presentation, including all materials, should not be construed as legal services, legal advice, or in any way establishing an attorney-client relationship. Credit unions should contact their own legal counsel for advice. Information may have changed since this presentation was prepared. This information is intended to only be a summary and is not all inclusive. 1

2 ELDER FINANCIAL ABUSE Warning Signs Risk Factors CFPB s Recommendations Reporting Responsibilities Protective Tools 2

3 Financial Abuse Taking money or property Forging a signature Using coercion to sign legal documents Using property or possession without permission Confidence crimes - cons 3

4 HOW DO YOU SPOT IT? Risk Factors Dependency Failing health or cognition Confusion Bereavement and loneliness Risk Factors Seniors who are young, urban and collegeeducated lose more money than those who are not; Seniors described as extremely friendly lose four times as much to elder financial abuse 4

5 Financial Abuse Perpetrators Predatory Individuals Unscrupulous Professionals Financial Abuse Perpetrators Family Members Elder Financial Abuse Warning Signs 5

6 Changes in or unusual behavior Member is confused and cannot explain transactions Member appears neglected Refusal to make eye contact, displays shame or reluctance to talk Changes in or unusual behavior Member is accompanied by a stranger Member doesn t speak on his/her own behalf, even though present Member appears fearful Don t Ignore Your Gut 6

7 Suspicious Financial Activities Unusual volume of account activity Large or frequent withdrawals Change in usual habits Requests by 3 rd parties for access to accounts Suspicious Financial Activities Suspicious signatures on checks or other documents Unfamiliar handwriting on checks, slips or applications Debit card or ACH transactions beyond their capabilities, ie: music downloads Suspicious Financial Activities New POA or adding someone to signature card when member seems confused Mail not going to member s address Sudden increase in debt Money being withdrawn with no apparent benefit to member 7

8 Suspicious Financial Activities Closing of CD accounts, regardless of penalties Transfers to accounts accessible by other parties Opening new cards, with stable history Long standing beneficiary trusts revoked Suspicious Financial Activities ATMs used at casinos - member doesn t gamble Checks written as loans or gifts Multiple requests to wire money internationally or to MSBs HOW DO YOU STOP IT? 8

9 CFPB s RECOMMENDATIONS 1. Procedures 2. Training 3. Technology 4. Reporting 5. Protecting 6. Collaborating CFPB S RECOMMENDATION #1 Develop internal PROTOCOLS AND PROCEDURES for protecting account holders from elder financial abuse. POLICIES & PROCEDURES When teller is concerned, who and when should they tell? What are the roles of tellers, supervisors and credit union security in detecting and preventing abuse? How much information should the teller or supervisor gather? 9

10 POLICIES & PROCEDURES Who makes the report about potential abuse and how much information should be provided to law enforcement or APS? What other reporting needs to be completed? SAR? Teller Response Steps Learn reason for questionable transactions Check third party authorization and documentation When suspicious, contact supervisor immediately Supervisor Response Steps Interview member in private, if possible Offer options, such as waiting to complete transaction Notify security of questionable transaction 10

11 CFPB S RECOMMENDATION #2 TRAIN management and staff to prevent, detect, and respond to elder financial abuse. TRAINING Indicators of potential elder financial abuse How to take preventive measures Action steps when you suspect elder financial abuse How to report suspected abuse to APS, law enforcement, FinCEN Tailor training to difference staff roles ROLE-PLAY Caregiver asks the credit union to grant her power of attorney for an elderly member. WHAT WOULD YOU DO? Sample Answer: Credit union member rep asks older adult her wishes; Tells caregiver that credit union will not grant power of attorney; Member rep contacts supervisor; Supervisor contacts Adult Protective Services (APS); APS asks CU if it can put a hard hold on the account; CU alerts other branches. 11

12 What Would You Do? Older adult withdraws large amounts of money to purchase lottery WINNINGS. A suspicious man attempts to get older adult to withdraw large amount of cash. What Would You Do? Older adult discovers bank account is missing funds Grandson wants to establish joint account without older adult being present CFPB S RECOMMENDATION #3 Use TECHNOLOGY to detect elder financial abuse. 12

13 CFPB S RECOMMENDATION #4 REPORT all cases of suspected exploitation to relevant federal, state and local authorities. Reporting Check your state laws Confidentiality Adult Protective Services (APS) FinCEN - SARs Privacy & Elder Financial Abuse Privacy Law General Rule Exceptions to the rule NCUA Guidance clarifies the rule 13

14 CFPB S RECOMMENDATION #5 PROTECT older account holders. Advance Consent for Trusted 3 rd Party Protective Opt-In Account Features View-Only Access Convenience Accounts Educate your members EDUCATE YOUR MEMBERS Protect PINs and account numbers CU would never ask for that information Never give personal info to someone who phones you Never pay a fee or tax to collect winnings EDUCATE YOUR MEMBERS Consult a professional before signing any document you don t understand Build a relationship with your credit union Check reference and credentials before hiring anyone 14

15 CFPB S RECOMMENDATION #6 Collaborate with other stakeholders. RE-CAP Reviewed how to spot suspected elder financial exploitation Risk Factors Red Flags - unusual behavior Red Flags suspicious financial activities Reviewed the CFPB s 6 recommendations on how to stop and prevent elder financial exploitation RE-CAP Addressed privacy concerns with sharing information through reporting or with trusted 3 rd parties Reviewed protective tools 15

16 DON T ASSUME SOMEONE HAS ALREADY REPORTED A SUSPICIOUS SITUATION QUESTIONS? Cucomply@cuna.com 16