Financial Abuse Meeting Program

Transcription

1 Financial Abuse Meeting Program Banking industry training and practices to reduce the risk of financial abuse against seniors March 26, 2013 Do not widely distribute

2 Banking Industry Initiative began in 2011 through the Canadian Banker s Association In 2011 through the CBA initiative, participating banks agreed upon a standardized list of red flags/warning signs and common scenarios CIBC launched an enterprise-wide project to address the rising risk of financial abuse of older adults Internal escalation form, central mailbox and central investigations and support team created Job Aids outlining red flags and common scenarios created, internal procedures communicated throughout the organization Training deck developed and delivered to all frontline support areas (including call centres, support lines and business risk leaders) Escalation process layered on to existing fraud monitoring Note: Each participating bank has different processes and systems in place to help identify and handle escalations of financial abuse 2

3 Implementation of new escalation process was challenging Immediate increase of escalations and questions from frontline leaders and staff Core team and legal resources were stretched Requirement to balance interests of senior clients with the demands by caregivers and attorneys under POA Remote transactions through online, ABM access, or multiple branches created additional challenges to identifying abuse Confusion between bank not accepting POA vs. not permitting attorney to do something, i.e. make accounts joint 3

4 CIBC Escalation Process Suspected Abuse Identified Branch Telephone Banking Investment Advisor Other Legal Senior Abuse Team Risk Monitoring collects additional facts takes immediate steps if necessary consults other groups for advice Escalates if appropriate PGT POLICE HEALTH AUTHORITY May engage local branch/interview Monitor accounts short term Await court order 4

5 CIBC Experience: 500 escalations to central investigation unit within one year 2012 Findings: Almost 500 escalations received to-date mainly from branch network Overall a very small percentage of client base 95% of escalations indicative of actual financial abuse 80% of cases involved family members 33% of cases involve the misuse of POA 33% of files escalated to PGT 3% of files escalated to police Average time to close files days Key Challenges Determining who to contact in remote areas Managing different Legislative regimes Requirement to follow up on status of file with PGT and/or Police 5

6 Red flags that warn us that our clients may be a victim of financial abuse Banking Activity Increased frequency of withdrawals Large cash withdrawals Increased requests for bank cheques Increased use of ABMs when little or no previous use Third Party Involvement Inappropriate influence by third party client wants to add co-signer to accounts Unusual interest by third party Third party insists on handling client s financial affairs and blocks bank s attempt to contact client New friend is eager to escort, and assist, client to the bank Offers investment advice, appropriate or not Increased third party cheque cashing Verbal abuse by third party in the background or at the teller Client Concerns Increased confusion about banking and financial issues Lack of knowledge of accounts and transactions Frequent visits to bank to clarify concerns Not receiving financial statements Requests that bank personnel notarize forms that client does not appear to understand Implausible explanation of unusual activity or behaviour Clients are forced from home by child/ren 6

7 Powers of attorney and joint accounts are the primary vehicles used by abusers Powers of Attorney 1 Powers of Attorney misused by attorney to: place mortgages or reverse mortgages on seniors property to access equity in seniors homes add senior as a guarantor or pledging senior s assets as collateral for a third party credit application sell senior s home and pocket proceeds of sale access seniors bank and/or investment accounts change accounts from sole account to joint account change beneficiary designations on registered plans or insurance accessing senior s investment accounts and changing the risk profile to higher risk Joint Accounts Joint accounts are typically established to eliminate probate taxes or for convenience of family member looking after senior s affairs. Subject to abuse when joint holder uses the senior s money for own benefit or purposes and not for the senior s benefit. Cards Established for convenience of family member to look after senior s needs, however, instead, credit/debit cards/convenience cards are used to purchase goods and services for personal benefit of fraudster and not for benefit of senior client. Forgery Fraudster forge signatures to obtain new lines of credit and loans or use existing credit cards 7