ELDER JUSTICE

Strengthening Efforts to 

Combat Elder Financial 

Exploitation

Statement of Kay E. Brown, Director

Education, Workforce, and Income Security

Testimony 

Before the Senate Special Committee 

on Aging

For Release on Delivery 

Expected at 2:00 p.m. EST

Thursday, November 15, 2012

GAO-13-140T

United States Government Accountability Office

GAO
Page 1 GAO-13-140T 

United States Government Accountability Office

Washington, DC 20548

Chairman Kohl, Ranking Member Corker, and Members of the 

Committee:

I am pleased to have this opportunity to present some of the results from 

the latest study in our body of work on elder justice issues. According to 

experts, the illegal or improper use of older adults’ funds, property, or 

assets is reaching epidemic proportions in this country and has farreaching effects on its victims and society, in general. The money older 

adults lose in these cases is rarely recovered and this loss can undermine 

both the health of older adults and their ability to support and care for 

themselves. One study estimated that financial exploitation cost older 

adults at least $2.9 billion in 2010.

1

Older adults can be exploited by family members and friends, home care 

workers, legal guardians and other fiduciaries, as well as those in the 

financial services industry. They also often fall prey to mail, telephone, 

and internet scams that offer substantial lottery or other winnings in 

exchange for so-called taxes or fees. Because elder financial exploitation 

can take many forms, combating it involves state and local agencies, and 

their federal counterparts, across social services, criminal justice, and 

consumer protection systems. 

My testimony today is based on our November 2012 report, which is 

being released to the public today.2

 

1 MetLife Mature Market Institute et al. (2011), The MetLife Study of Elder Financial 

Abuse: Crimes of Occasion, Desperation, and Predation against America’s Elders. This 

estimate is based on a study of media reports from April to June 2010.

It describes the challenges states 

face in combating the many types of elder financial exploitation and the 

actions federal, as well as state and local agencies, are taking to 

overcome these challenges. To obtain this information we interviewed 

state and local officials from social services, criminal justice, and 

consumer protection agencies in California, Illinois, New York, and 

Pennsylvania—states that vary geographically, and have large elderly 

populations and a number of initiatives that aim to combat elder financial 

exploitation. We also identified and assessed the activities aimed at 

preventing or responding to elder financial exploitation of seven federal 

2 GAO, Elder Justice: National Strategy Needed to Effectively Combat Elder Financial

Exploitation, GAO-13-110 (Washington, D.C.: November 15, 2012).

 
 

Page 2 GAO-13-140T 

agencies;3

We found that state and local social services, criminal justice, and 

consumer protection agencies face many challenges as they work to 

prevent and respond to elder financial exploitation. For example

conducted in-depth reviews of six prosecuted elder financial 

exploitation cases that are a non-generalizable sample of elder financial 

exploitation cases; interviewed many experts in this subject area; and 

reviewed relevant documents and published research. We conducted this 

performance audit from November 2011 to November 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. Our investigative activities 

were conducted in accordance with standards prescribed by the Council 

of the Inspectors General for Integrity and Efficiency.

• Officials in each of the four states we contacted cited the need for more 

safeguards to prevent exploitation by financial services providers, power 

of attorney4 agents, and paid in-home caregivers;

• Officials told us that older adults need more information about what 

constitutes elder financial exploitation and how to avoid it, but social 

services and law enforcement agencies do not always have the 

resources to promote public awareness in this area;

• Banks are well-positioned to recognize, report, and provide evidence 

supporting investigations in elder financial exploitation cases; however, 

many social services and law enforcement officials we spoke with 

indicated banks do not always recognize and report exploitation or 

provide the evidence needed to investigate it; and

 

3 We reviewed the activities of the Department of Health and Human Services’ 

Administration on Aging, Bureau of Consumer Financial Protection, Department of Justice, 

Federal Trade Commission, Department of the Treasury’s Financial Crimes Enforcement 

Network, Postal Inspection Service, and Securities and Exchange Commission.

4 An older adult (the principal) can use a legal document referred to as a financial power 

of attorney to appoint another person (an agent) to manage their finances should they 

become incapable of doing so.
 

Page 3 GAO-13-140T 

• According to experts, collaboration between the social services system—

which protects and supports victims—and the criminal justice system—

which investigates and prosecutes crimes—can be an effective means of 

combating elder financial exploitation. However, officials in three of our 

four states noted that this collaboration can be difficult to achieve. These 

two systems do not respond to exploitation or carry out their work in the 

same way, so there can be difficulties communicating across disciplines 

and different views regarding limits on information sharing.5

In many of the locations we contacted, state or local agencies are actively 

pursuing solutions to at least some of these challenges and there are 

some federal initiatives as well that could help address them. When it 

comes to preventing the sale to older adults of unsuitable or fraudulent 

investments, the Securities and Exchange Commission (SEC) and the 

Bureau of Consumer Financial Protection (CFPB), have each taken steps 

to help older adults avoid being exploited. SEC and CFPB have 

conducted research related to investment fraud that targets older adults, 

and there is a link on SEC’s website to Financial Industry Regulatory 

Authority (FINRA)6 information consumers can use to check a financial 

services provider’s qualifications and to understand the many 

designations used by securities professionals. CFPB also plans to issue a 

report in early 2013 addressing how information about financial advisors 

and their credentials should be provided to older adults. To prevent 

exploitation by power of attorney agents and paid in-home caregivers, 13 

states have adopted the Uniform Power of Attorney Act in its entirety,7

We found that law enforcement authorities in some locations have 

devoted resources to promoting public awareness of elder financial 

and Napa County, California, now requires paid in-home caregivers to 

submit to a background check and obtain a permit before they can be 

hired.

 

5 Brandl et al, Elder Abuse Detection and Intervention, (New York: 2007).

6 FINRA is a self-regulatory organization that writes and enforces rules for brokers and 

brokerage firms.

7 Among other things, the Uniform Power of Attorney Act (1) explicitly defines the duties of 

the power of attorney agent, including fiduciary duties such as acting in good faith and 

keeping careful records; (2) allows a third party to refuse to honor a power of attorney 

agreement if there is a good faith belief that the principal may be subject to abuse, and 

requires the third party to report to APS; (3) allows co-agents to be appointed for 

additional third-party oversight; and (4) imposes liability on agents who violate the law.
 

Page 4 GAO-13-140T 

exploitation. For example, the Pennsylvania Attorney General’s Office has 

published a guide on how seniors can avoid scams and fraud, and in 

Cook County, Illinois, the Senior Law Enforcement Academy within the 

Sheriff’s Department instructs older adults in how to prevent elder 

financial exploitation. In addition, each of the federal agencies we 

reviewed independently produces educational materials that could help 

prevent elder financial exploitation.

We also identified state, local, and federal activities encouraging banks to 

work with social services and law enforcement, and activities to promote 

and support collaboration between the social services and criminal justice 

systems. Illinois, for example, requires bank employees to receive training

in how to report exploitation. Although we could identify no federal 

requirements for banks to train employees to recognize or report elder 

financial exploitation, the Administration on Aging (AoA) is considering 

collaborating with one large national bank on a project to develop such 

training. Financial institutions are required to file Suspicious Activity 

Reports (SAR) of potentially illegal bank transactions that involve, 

individually or in the aggregate, at least $5,000 with the Financial Crimes 

Enforcement Network (FinCEN), which has issued an advisory to banks 

that describes elder financial exploitation and its indicators and asks 

banks to specify “elder financial exploitation” when applicable in their 

SARs. 

In each of the four states we contacted, there are also local initiatives to 

help bridge the gap between social services and criminal justice 

agencies. In some Pennsylvania and New York counties, multidisciplinary 

groups meet to discuss and help resolve all types of elder abuse cases. 

The Philadelphia Financial Exploitation Task Force and financial abuse 

specialist teams in some California counties, on the other hand, 

concentrate only on elder financial exploitation cases. Some steps have 

also been taken at the federal level to promote and inform collaboration 

between the social services and criminal justice systems in states. For 

example, a few grants to combat elder abuse or other crimes from AoA 

and the Department of Justice have required or encouraged collaboration, 

such as the use of multi-disciplinary teams, in states.

Elder financial exploitation is a complex, nationwide problem, and 

combating it effectively requires a concerted, ongoing effort on the part of 

states and localities, as well as support and leadership at the federal 

level. Each of the seven federal agencies we reviewed is working to 

address this problem in ways that are consistent with its mission. 

However, preventing and responding to elder financial exploitation also 
 

Page 5 GAO-13-140T 

calls for a more cohesive and deliberate national strategy. The Elder 

Justice Coordinating Council (EJCC)—a group of federal agency heads 

charged with setting priorities, coordinating federal efforts, and 

recommending actions to ensure elder justice nationwide—can be the 

vehicle for defining and implementing such a national strategy. To this 

end, we are recommending that the EJCC develop a written national 

strategy for combating elder financial exploitation. We suggest that this 

strategy ensure coordination of public awareness activities across federal 

agencies; address the need to identify and disseminate promising 

practices and other information states and localities can use to prevent 

exploitation; educate the public; promote agency collaboration; and 

promote investigation and prosecution of elder financial exploitation. Our 

report also recommends a number of actions individual federal agencies 

should take to better support state and local social services and law 

enforcement agencies, such as studying the feasibility of requiring that 

consumer complaints to the Federal Trade Commission’s (FTC)

Consumer Sentinel Network database include victim’s age or an 

indication of whether the complaint involves elder financial exploitation. 

We provided a draft of this report to the seven federal agencies that we 

reviewed. CFPB, FTC, and the Department of Health and Human 

Services (HHS) provided comments. CFPB and HHS supported GAO’s 

recommendations. FTC did not believe they should examine the feasibility 

of requiring victim’s age in complaints. GAO maintains the importance of 

its recommendation.

Chairman Kohl, Ranking Member Corker, and Members of the 

Committee, this concludes my statement. I would be happy to answer any 

questions you might have.

For questions about this testimony, please contact Kay Brown at (202) 

512-7215 or brownke@gao.gov. Contact points for our Office of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Individuals who made key contributions to this 

testimony include Clarita Mrena, Eve Weisberg, Andrea Dawson, and 

Brittni Milam. Also contributing to the report were James Bennett, Gary 

Bianchi, Jason Bromberg, Alicia Cackley, Paul Desaulniers, Holly Dye, 

Eileen Larence, Jean McSween, Chris Morehouse, Claudine Pauselli, 

Almeta Spencer, Kate Van Gelder, and Craig Winslow.

Contacts and 

Acknowledgments 

(131214)
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations 

Public Affairs

Please Print on Recycled Paper.