CFPB’s Guide To Elder Financial Exploitation: Patterns

There are no single forms of elder financial exploitation. When analyzing Suspicious Activity Reports (SARs), the Consumer Financial Protection Bureau (CFPB) categorized reported SARS into two specific areas, scams, and non-scams. Non-scams were further defined as theft by someone known to the senior, account takeovers, and other crimes including identity theft. In general, scams were defined as “scheme involving the transfer of money to a stranger for a promised benefit that the older adult did not receive.”

Different Patterns of Elder Financial Exploitation

Depository institutions determined that 64 percent of activity between 2013 and 2017 was defined as “non-scam” while only 9 percent was of unknown origin. However, money service businesses reported 69 percent of all reports pertained to scams. Insurance companies, casinos, and other filers who did not fall into either category noted that 57 percent of all reports are associated with non-scams while 26 percent were of unknown classification.

SARs Involving Movement of Funds

One of the analysis conducted during the review of SARs for elder financial exploitation was how funds were getting from the victim to the person responsible for the scam. In more than one half of the reports, the funds transfers were moving via a wire transfer. The next 44 percent of transfers involved checking or savings accounts. Combined, these two methods accounted for 96 percent of all funds transferred from the victim. Unfortunately, in nearly 20 percent of all reports, two or more methods of obtaining funds from the victim were noted.

Various Monetary Losses by Type of Financial Account

Nearly 1,000 SARs were analyzed to determine the amount of money which was lost on average by senior victims. The percentage varied depending on the type of transaction which occurred. What the analysis showed was that 79 percent of transactions in which a senior lost money the loss noted in the SAR was from a bank account, checking or savings and resulted in an average loss of $48,300. This is significantly larger than the median losses of just over $22,000. Credit card transactions resulting in direct losses to victims accounted for $32,600 in losses, and money transfers resulted in $32,800 in losses.

Time During Which Suspicious Activity Occurred

When reports are filed, the reporting agency must provide a range of dates during which they believe the activity resulting in the report took place. What was learned from this data was disturbing patterns emerged which were sobering. Here are some of the time periods:

  • When a joint account was involved – in these instances, the fraud was perpetrated over the longest period of time, nearly seven months (230 days).
  • When a family member was suspected of being the perpetrator of fraud – in these instances, most cases were not discovered for more than six months (197 days)
  • Victim had diminished capacity – these cases were often not discovered for almost six months (179 days)
  • Victim was over the age of 80 – fraud cases related to victims age 80 or older went unnoticed for nearly five months (134 days)

On average, most suspicious activities were detected within four months (120 days) although in nearly 30 percent of the cases, the activities lasted 10 days or less. In slightly more than 27 percent of the reports however, the activities leading to the exploitation lasted 100 days or more.

Reporting Suspicious Activities of Elder Financial Exploitation

Unfortunately, one of the most disturbing patterns which was detected in the review of SARs was how few of them were reported to local law enforcement agencies even after they were discovered. Each state does have social services agencies which are there to help seniors who are being victimized. The upside is that in cases where reports were filed with a local agency, which only account for 28 percent of all EFE SARs, 23 percent were reported to adult protective services while only seven percent were reported to law enforcement agencies.

More depository institutions (banks, etc.) were reporting to local agencies versus money services businesses which reported only one percent of all SARs to local law enforcement or protective agencies.

These disturbing patterns will continue unless there is a better mechanism for training those who are employed in the financial industry to recognize the patterns which may indicate there is reason to believe a senior is being taken advantage of by either someone they know or a stranger. Unfortunately, since most law enforcement and senior protection agencies do not utilize, nor do they have access to the database where this information is stored, it is nearly impossible for them to realize the breadth of the problem.

With an ever-aging population, we can only expect these statistics to continue to grow over time, particularly when one reviews the variances in the data which occurred between 2014 and 2017. Because many of the victims are seniors, they may avoid reporting their losses to a family member for fear of being ridiculed. In too many cases, the person who is actually exploiting the senior is a member of their family, further complicating the issue.

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