BY LESLIE MCNALLY, J.D.
ABUSE AND EXPLOITATION of the elderly is statutorily defined in state law and as codified in the United States Code. However, the abuse often referred to as “elder financial exploitation” (EFE) has become the most common form of elder abuse in the United States. Under the
Older Americans Act of 1965, as amended, “financial exploitation” is the fraudulent
or otherwise illegal, unauthorized, or improper act or process of an individual,
including a caregiver or fiduciary, who uses the resources of an older individual for
monetary or personal benefit, profit, or gain, or that results in depriving an older
individual of rightful access to, or use of, benefits, resources, belongings, or assets
(42 U.S.C. 3002). Reports of EFE at both the federal level (through identification of
elder financial abuse in the designated reporting field and narratives in Suspicious
Activity Reports (SARs) and state level (through reports to local Adult Protective
Services agencies (APS), local law enforcement and other local agencies) have
increased substantially over the years and show no signs of slowing down. According
to the National Conference of State Legislatures (NCSL), a recent study estimates
that one in five older Americans are victims of EFE, losing $3 billion annually.
Older adults can be attractive targets for abusers
and fraudsters because they may have significant assets, higher equity in their homes, and be recipients
of recurring sources of income (i.e., Social Security,
pensions and other retirement accounts). Older adults
may also be particularly susceptible to this abuse due to
isolation, cognitive decline, physical disability or other
health issues. In addition, they may be dependent on
care from their abuser in order to remain independent.
Examples of EFE include, but are not limited to: iden-
tity theft; check fraud; counterfeit debit/credit cards;
misuse of caretakers, including theft of property and
money; lottery and sweepstakes scams; grandparent/
Perpetrators include, but are not limited to: family
members, caregivers, financial advisors, home repair
contractors, fiduciaries (such as agents under power
of attorney or guardians), scam artists, charitable or-
ganizations, and friends or neighbors. Of additional
consequence, many losses go unreported due to embar-
rassment or fear that revealing the truth will lead to
further restrictions on the individual’s independence.
On federal and state levels, financial institutions have
been recognized as those that can play a key role in detecting and preventing EFE. Financial institutions know
Financial Exploitation
of Older Adults
