on preventing and responding to EFE. In these documents the CFPB’s Office
for Older Americans identifies best practices for banks and credit unions to
assist in preventing EFE and intervening effectively when it occurs. The broad
scope of recommendations includes:
■ ■ ■ Train management and staff to prevent, detect, and respond to EFE, as
well as watch for “red flag” categories of possible EFE. In doing so, also
be aware of the possible fear an elder person may have in making these
explanations, and try to find a comfortable way he or she can talk with
the banker. Ask customers to explain and confirm transactions that raise
these red flags:
• Transaction pattern changes, such as: increase in total monthly cash withdrawals compared to historical patterns, atypical ATM card use, uncharacteristic attempts to wire large sums of money, uncharacteristic non-sufficient
funds activity or overdraft fees, missing recurring deposits, closing CDs or
accounts without regard to penalties, or unusual gaps in check numbers.
• Identity theft and coercion, such as: a new third party suddenly begins
conducting financial transactions on behalf of the older customer without proper documentation or does not allow the customer to speak for
themselves, the customer is confused by or unaware of account changes,
or customer requests to send account statements to a third party’s address.
• Behavioral changes, such as: the older customer shows an unusual degree
of fear or submissiveness towards a caregiver, the customer shows a
sudden reluctance to discuss financial matters, or the customer requests
information about how to conduct unusual money transactions or mentions lottery or sweepstakes opportunities or winnings.
• Signs of diminishing capacity such as, the older customer appears newly
distressed, unkempt or unhygienic, or is unable to clearly communicate
with staff.
■ ■ ■ Detect EFE by harnessing technology, including the use of sophisticated
automated fraud detection systems and predictive analytics.
■ ■ ■ Report all cases of suspected exploitation to relevant federal, state and
local authorities:
• Be aware of and stay current with all state reporting mandates, and
implement and monitor any state EFE training requirements (see more
about state-specific information in the State EFE Mandates section
below);
• File SARs;
• Understand that the GLBA is not a barrier to reporting suspected EFE;
• Understand the roles of first responders (i.e., APS, law enforcement,
long-term care ombudsmen);
• Include core components in reports to state and local authorities; and
• Expedite documentation requests.
■ ■ ■ Protect older account holders:
• Comply with EFTA and Regulation E (rules for extending time limits for
consumers for extenuating circumstances, rules for accepting notices of
unauthorized EFTs, and confirm conditions are met before imposing
any liability on a consumer for unauthorized EFTs);
• Offer account holders the opportunity to consent to disclosure of account information to trusted third parties when the financial institution
suspects EFE; and
• Offer age-friendly services that can enhance protections against EFE (such
as offer information about planning for incapacity, honoring powers of
attorney, offer protective opt-in account features, and offer convenience
accounts as an alternative to traditional joint accounts).
■ ■ ■ Collaborate with other stakeholders:
• Participate in and support coordinated efforts to educate older account
holders, caregivers and the public; and
• Participate in and support local or regional multidisciplinary network
initiatives (such as the voluntary Senior$afe program that was launched
in Maine and used as the model for the federal Senior Safe Act of 2018.)
On August 30, 2017, FinCEN and the CFPB published a Memorandum on
Financial Institution and Law Enforcement Efforts to Combat EFE. In addition
to reconfirming all the above advisories and guidance, this memorandum
emphasized collaboration between financial institutions, law enforcement
and APS, and especially how SARs may aid law enforcement’s investigations
of EFE, even at the local level. As access to SARs and their use is restricted
by federal law, the memorandum stated that if a law enforcement agency
does not have direct access to FinCEN’s database, the agency can contact
FinCEN at frc@fincen.gov for referral to an appropriate state or regional
point of contact, who can assist the investigator with a SAR-related inquiry.
On February 27, 2019, the CFPB’s Office of Financial Protection for Older
Americans released a report on a study of SAR EFE-specific filings. The
report presented findings based on selected data fields from all EFE SARs
filed between 2013 and 2017 and representative samples of SARs transcripts
(which include narrative information provided by the filers). Among the key
findings in the report are:
■ ■ ■ EFE SAR filings quadrupled from 2013 to 2017.
■ ■ ■ In the report period, filers reported 176,700 EFE SARs involving more
than $6 billion in actual losses to the older adult or to the filer (i.e., the
financial institution), attempts to steal the older adults’ funds, or both.
In 2014, actual losses and attempts totaled $931 million. In 2017, there
were 63,500 EFE SAR filings that included $1.7 billion in suspicious
activities. Overall, only 15 percent of the EFE SARs described solely an
attempt with no resulting monetary loss (transactions that were blocked,
rescinded, or refunded).
■ ■ ■ The average amount lost by an older adult was $34,200, but a monetary
loss was more common and the losses were even greater (average $50,000)
when the older adult knew the suspect or the suspect was a fiduciary.
In seven percent of the EFE SARs, the loss to the older adult exceeded
$100,000. The average amount of loss to the filer was $16,700.
■ ■ ■ The most common financial product used to move funds involved a money
transfer, but checking or savings accounts used to move funds had the
highest monetary losses.
■ ■ ■ Unfortunately, fewer than one-third of the EFE SARs indicated that the
filer had reported the suspicious activity to state or local adult protective
services, law enforcement or other authorities.
In addition to all of the agency action, Congress recently passed the Economic
Growth, Regulatory Relief, and Consumer Protection Act (SF 2155, Public Law
No. 115-174). This legislative package included the Senior Safe Act (Section
303), which strengthens protection against liability as may be provided under
state law for reporting EFE. Effective May 24, 2018, covered financial institutions
and their employees who receive specialized training are immune from civil
and administrative liability for good faith reporting of suspected exploitation
of senior citizens. The Act also provides guidance regarding the content, timing
and record-maintenance requirements of such training.
State EFE Mandates:
As briefly mentioned above, it is recommended that one pay attention to
state mandates. Currently, many states require financial institutions to report
suspected EFE to APS, law enforcement, or both. There are also states that
require “any person” with knowledge or suspicion of EFE to make official
