Senior $afe Act and Other Safeguards Against Financial Exploitation

Joseph and Carol are in their 80’s and are retired. Recently, their daughter Karen moved in after a tough divorce that left her broke. One of the reasons Karen’s husband left was because of her spending habits. Shortly after moving in with her parents, Karen began making bank withdrawals of money she didn’t intend to repay from her parent’s account without their knowledge, leaving them with thousands less in their savings. The withdrawals took place over a series of months, but the bank never reported them! If they had and action was taken sooner, the couple’s debt could have been less devastating.

What occurred in our example is a form of what’s known as financial exploitation. Financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for his/her own personal benefit. This frequently occurs without the knowledge or consent of a senior or disabled adult, depriving him or her of vital financial resources for his or her personal needs.

Common Forms of Financial Exploitation

Are you or a loved one a victim of financial exploitation? These are some of the most commonly reported forms that you should be aware of, as reported to Adult Protective Services agencies:

  • Theft: involves assets taken without knowledge, consent or authorization; may include taking of cash, valuables, medications other personal property.
  • Fraud: involves acts of dishonesty, often by persons entrusted to manage assets. who misappropriate assets for unintended uses; may include falsification of records, forgeries, unauthorized check-writing, and Ponzi-type financial schemes.
  • Real Estate: involves unauthorized sales, transfers or changes to property title(s); may include unauthorized or invalid changes to estate documents.
  • Contractor: includes building contractors or handymen who receive payment(s) for building repairs, but fail to initiate or complete the project; may include invalid liens by contractors.
  • Lottery scams: involves payments (or transfer of funds) to collect unclaimed property or “prizes” from fake lotteries and sweepstakes.
  • Electronic: includes “phishing” e-mail messages to trick persons into unwittingly surrendering bank passwords; may include faxes, wire transfers, telephonic communications.
  • Mortgage: includes financial products which are unaffordable or out-of-compliance with regulatory requirements; may include loans issued against property by unauthorized parties.
  • Investment: includes investments made without knowledge or consent; may include high-fee funds (front or back-loaded) or excessive trading activity to generate commissions for financial advisors.
  • Insurance: involves sales of inappropriate products, such as a thirty-year annuity for a very elderly person; may include unauthorized trading of life insurance policies.

What’s Being Done to Stop Financial Exploitation?

The Senior $afe Act, a bipartisan bill with the goal of helping to protect older adults from financial exploitation and fraud, unanimously passed in the House of Representatives on Monday and is expected to be considered by the full Senate soon.

The Senior $afe Act would protect banks, credit unions, investment advisers, broker-dealers, insurance companies and insurance agencies from being sued for reporting suspected exploitation or fraud as long as they have trained their employees about how to identify the warning signs of common scams and make reports in good faith to the proper authorities. So, in our example above, the bank may have been more likely to report the financial abuse.

The bill has 26 co-sponsors in the Senate — Republicans, Democrats and an independent — and has been endorsed by the AARP and several financial, credit union, and banking-related organizations. We will keep you up to date on the status of the bill!

The federal government, states, commonwealths, territories and the District of Columbia currently all have laws designed to protect older adults from elder abuse and exploitation, and guide the practice of adult protective services agencies, law enforcement agencies, and others. These laws vary considerably from state to state. Visit the US Department of Justice website for details.

Additional Resources to Help

Know someone who is a victim of financial exploitation? Here are some resources to protect yourself or a loved one:

Tips from Virginia Department of Aging and Rehabilitative Services
Virginia Adult Protective Services
Maryland Adult Protective Services
Elder Financial Exploitation and Response Network Guide 

For more resources about elder abuse prevention, check out the federal government’s Eldercare locator.

Planning to Protect Loved Ones

Protecting seniors from financial exploitation is very important, which is why we continually share information on the topic. It is also very important to plan for your future and for your loved ones. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long- term care, please contact us to make an appointment for a no-cost introductory consultation.

Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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