One of the main concerns financial institutions face today is the increased potential for financial exploitation of older adults. Financial exploitation is the most common form of elder abuse, with most victims being women or older adults with significant health issues. Financial exploitation has been defined as the illegal or improper use of funds, property, or assets. Older adults can become targets of financial exploitation by family members, caregivers, scam artists, financial advisors, home repair contractors, fiduciaries (such as power of attorneys), and guardians. As abuse of the elderly grows more pervasive, financial institutions need to play a key role in preventing and detecting elder financial exploitation.
Since one of the primary components of an effective Anti-Money Laundering/Bank Secrecy Act (AML/BSA) program is “Know Your Customer,” training should be prevalent throughout the organization. Employees should be trained to recognize common “red flags” they will likely encounter within their respective areas of responsibility. These red flag points of financial abuse or exploitation can be incorporated into your AML/BSA program. Employees must identify unusual activity, respond to concerns, and report suspicious red flags to their AML/BSA officer or banking supervisor if they suspect that their customer’s account or the customer themselves show any of the following signs:
An effective financial institution AML/BSA program will monitor for suspicious activity, investigate, and report promptly and accurately per the regulation. This type of activity should be reported to applicable state, local, and federal authorities as well. Promptly reporting suspected financial exploitation to organizations such as adult protective services or law enforcement can trigger appropriate intervention, prevent future financial losses, or detect other potential health-related issues.
Financial institutions play a vital role in alerting authorities in suspected elder abuse cases. Because of the relationships financial institutions have with their elderly customers, they are in a position to assist in elder abuse prevention by incorporating these measures within the organization’s AML/BSA program. Educating customers about potential financial risk can help as well. In order for this initiative to be successful, this detection must start with the Board of Directors and flow through to front-line employees.
For more information about financial exploitation of the elderly and how financial institutions can incorporate this endeavor into their daily AML/BSA programs, contact one of the experts listed below at PYA (800) 270-9629.