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78–020 PDF 2013

S. HRG. 112–716 

AMERICA’S INVISIBLE EPIDEMIC: PREVENTING 

ELDER FINANCIAL ABUSE 

HEARING 

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

WASHINGTON, DC 

NOVEMBER 15, 2012 

Serial No. 112–24 

Printed for the use of the Special Committee on Aging 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

SPECIAL COMMITTEE ON AGING 

HERB KOHL, Wisconsin, Chairman 

RON WYDEN, Oregon 

BILL NELSON, Florida 

BOB CASEY, Pennsylvania 

CLAIRE MCCASKILL, Missouri 

SHELDON WHITEHOUSE, Rhode Island 

MARK UDALL, Colorado 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE MANCHIN III, West Virginia 

RICHARD BLUMENTHAL, Connecticut 

BOB CORKER, Tennessee 

SUSAN COLLINS, Maine 

ORRIN HATCH, Utah 

MARK KIRK III, Illinois 

DEAN HELLER, Nevada 

JERRY MORAN, Kansas 

RONALD H. JOHNSON, Wisconsin 

RICHARD SHELBY, Alabama 

LINDSEY GRAHAM, South Carolina 

SAXBY CHAMBLISS, Georgia 

CHAD METZLER, Majority Staff Director 

MICHAEL BASSETT, Ranking Member Staff Director 
(III) 

CONTENTS 

Page 

Opening Statement of Senator Herb Kohl ............................................................. 1 

Statement of Senator Bob Corker .......................................................................... 2 

Statement of Senator Bill Nelson ........................................................................... 2 

PANEL OF WITNESSES 

Frank Abagnale, Author and Consultant, Abagnale & Associates, Washington, 

DC .......................................................................................................................... 3 

Kay Brown, Director, Education, Workforce and Income Security, U.S. Government Accountability Office, Washington, DC ............................................... 5 

Hubert ‘‘Skip’’ Humphrey III, Assistant Director, Office of Older Americans, 

Consumer Financial Protection Bureau, Washington, DC ............................... 7 

Paul Smocer, President, Bits, Financial Services Roundtable, Washington, 

DC .......................................................................................................................... 8 

Paul Greenwood, Deputy District Attorney, Head of Elder Abuse Unit, Family 

Protection Service, San Diego, CA ...................................................................... 10 

APPENDIX 

WITNESS STATEMENTS FOR THE RECORD

Frank Abagnale, Author and Consultant, Abagnale & Associates, Washington, 

DC .......................................................................................................................... 28

Kay Brown, Director, Education, Workforce and Income Security, Government 

Accountability Office, Washington, DC .............................................................. 34 

Hubert ‘‘Skip’’ Humphrey III, Assistant Director, Office of Older Americans, 

Consumer Financial Protection Bureau, Washington, DC ............................... 42 

Paul Smocer, President, BITS, Financial Services Roundtable, Washington, 

DC .......................................................................................................................... 46

Paul Greenwood, Deputy District Attorney, Head of Elder Abuse Unit, Family 

Protection Division, San Diego, CA .................................................................... 57 

ADDITIONAL INFORMATION BY WITNESSES SUBMITTED FOR THE RECORD

Questions submitted by Senator Wyden for Mr. Abagnale .................................. 64 

Questions submitted by Senator Wyden for Mr. Humphrey ................................ 65 

GAO Report: Elder Justice: National Strategy Needed to Effectively Combat 

Elder Financial Exploitation ............................................................................... 66 

ADDITIONAL STATEMENTS SUBMITTED FOR THE RECORD

Senator Bernie Sanders (I-VT) ............................................................................... 146 

Financial Industry Regulatory Authority, Washington, DC ................................ 148 

Elaine Roberts Musser, Attorney at Law, Davis, CA ........................................... 156 

U.S. Postal Inspection Service, Washington, DC .................................................. 165 

University of Cincinnati, Center for Aging with Dignity, Cincinnati, OH ......... 168 

(1) 

AMERICA’S INVISIBLE EPIDEMIC: 

PREVENTING ELDER FINANCIAL ABUSE 

THURSDAY, NOVEMBER 15, 2012 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:00 p.m. in Room 

SD–562, Dirksen Senate Office Building, Hon. Herb Kohl, Chairman of the Committee, presiding. 

Present: Senators Kohl [presiding], Wyden, Nelson, Casey, 

Whitehouse, Blumenthal, and Corker. 

OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN 

The CHAIRMAN. Good afternoon. We appreciate very much your 

presence at this hearing. 

Today we will be talking about ways to prevent a growing national crisis, elder financial abuse. From the opportunistic thief 

working as a home care aide, to the shady telemarketer who befriends a lonely senior on the phone to take advantage of him 

through a sweepstakes scam, the stories this Committee has heard 

are alarming. 

Seniors are being victimized every day, and the problem is getting worse. According to the Investor Protection Trust, one out of 

every five older Americans has already been duped by a financial 

scam. And while the costs associated with elder financial abuse are 

estimated to be $2.9 billion every year, financial abuse often does 

go unrecognized because victims are too afraid or embarrassed to 

report the crime to authorities. 

The reality is, many of us may know an older adult who is at 

risk, or who has been a victim of elder financial abuse. It might 

be a family member, a neighbor, or a friend. In fact, someday it 

might indeed be each and every one of us. But there is hope. Today 

we will highlight new elder financial abuse prevention programs 

being implemented across the Federal, state, and private sectors. 

In addition, we will address ways that older Americans can take 

steps to protect themselves, as well as their assets. 

We will start today’s hearing with Mr. Frank Abagnale, who 

earned a Hollywood-worthy reputation for conning unsuspecting 

victims. He has come here to share tips for preventing identity 

theft and protecting against financial fraud. 

We will then review the findings of a Government Accountability 

Office report which describes what the Federal Government can do 

to help states combat financial exploitation. 
2 

We will also hear testimony from the Consumer Financial Protection Bureau, a member of the new Elder Justice Coordinating 

Council. 

Finally, our panelists from the Financial Services Roundtable 

and the San Diego County District Attorney’s Office will share 

their knowledge of prevention activities taking place in private 

banking institutions and at the state level. 

Over the years, I’ve seen our nation take great strides to combat 

elder financial abuse, from the passage of the Elder Justice Act to 

the creation of a background check system for nursing home employees. It is time to build on our efforts to remedy this invisible 

epidemic and break the cycle of stigma attached to this terrible 

crime. 

We thank you all for being here, and I’d like to hear now from 

Senator Corker. 

STATEMENT OF SENATOR BOB CORKER 

Senator CORKER. Thank you, Mr. Chairman, for bringing this 

hearing today and for all of these witnesses for showing up. I do 

look forward to your testimony, and I appreciate you highlighting 

this issue that affects so many people. 

And I’ve been told not to make any big deal about the fact that 

this is your last hearing, so I won’t do that, but thank you so 

much—— 

[Laughter.] 

Thank you so much for your tremendous leadership and for being 

such a pleasure for me and our staff to work with. 

The CHAIRMAN. Thank you, Senator Corker. 

Senator Nelson. 

STATEMENT OF SENATOR BILL NELSON 

Senator NELSON. Mr. Chairman, I will make a big deal. 

We obviously are going to miss you, and you have brought great 

distinguished service to the United States Senate. No one ever had 

to question your integrity or your word, and you have offered that 

kind of public service not only in leadership roles in the Appropriations Committee, but here as well. 

Even going back to the Good Book in ancient scriptures, it teaches us that two parts of society that we particularly want to take 

care of are the young and the old. And so as our government has 

developed over the years, that’s one of the great responsibilities of 

our American Government, is to make sure that the young and the 

old are protected, and what better subject than the subject of this 

hearing to underscore that. 

And then, if that were not enough, under the Chairman’s leadership, he has already passed the Elder Justice Act, which was put 

in as a part of the Affordable Care Act, coordinating the efforts of 

the Federal Government with the states’ senior centers, law enforcement organizations, community groups and social services to 

prevent the physical, emotional, and financial abuse of senators— 

of seniors. 

I keep replacing ‘‘senator’’ with ‘‘senior’’ so that when I am introduced as the senior senator of Florida, they often get it mixed 

up—— 
3 

[Laughter.] 

And they say ‘‘we’re welcoming the senior citizen of Florida.’’ 

[Laughter.] 

And the End Abuse in Later Life Act, which enhances direct 

services for victims of domestic violence and sexual assault, which 

are 50 years of age or older, and that was included in the Senatepassed reauthorization of the Violence Against Women Act, another 

one of your initiatives, Mr. Chairman. 

And the Elder Abuse Victims Act, which has been introduced to 

ensure Federal, state and local law enforcement agencies are working together with adult protective services to combat elder abuse. 

So, Mr. Chairman, your legacy is indelibly etched into not only 

this committee but the law of this country, and for that we are exceptionally grateful. 

The CHAIRMAN. We thank you so much. 

Senator NELSON. And if, in a few minutes, I may be excused, we 

have the acting director of the CIA coming on a number of topics 

that happen to be of currency, and with your permission, at that 

appropriate time, I will slip out. 

The CHAIRMAN. Thank you so much, Senator Nelson, for being 

here. 

And now we’ll introduce our witnesses. Our first witness today 

will be Frank Abagnale. Mr. Abagnale was made famous by the 

real-life depiction of his years as a con artist in the best-selling 

book ‘‘Catch Me If You Can,’’ which was also made into a film directed by Steven Spielberg. 

Next we’ll be hearing from Kay Brown, the Director of the Education Workforce and Income Security Team at the U.S. Government Accountability Office, where she focuses on improving government performance in delivering benefits and services to lower-income and vulnerable populations. 

Third, we’ll be hearing from Hubert ‘‘Skip’’ Humphrey, III, the 

Assistant Director of the Office of Older Americans at the Consumer Financial Protection Bureau. Mr. Humphrey has spent much 

of his professional life working to protect consumers. 

And then we’ll hear from Paul Smocer, who is the President of 

BITS, the Technology Policy Division of the Financial Services 

Roundtable. Previously, Mr. Smocer led BITS work in promoting 

safety and soundness of financial institutions through best practices and successful strategies. 

Finally, the committee will hear from Paul Greenwood, Deputy 

District Attorney for San Diego County. Mr. Greenwood is head of 

the Elder Abuse Prosecution Unit and has been involved in the 

prosecution of over 200 felony elder abuse cases. 

We thank you all for being here and, Frank, we’ll start with you. 

STATEMENT OF FRANK ABAGNALE, AUTHOR AND 

CONSULTANT, ABAGNALE & ASSOCIATES, WASHINGTON, DC 

Mr. ABAGNALE. Chairman Kohl and Ranking Member Corker, 

members of the Committee, I am honored to be invited to testify 

before you today on the seriousness of identity theft and financial 

fraud against the elderly, and the need for education. 

I am Frank Abagnale, subject of the book, movie and Broadway 

musical ‘‘Catch Me If You Can.’’ I have a unique perspective, hav-
4 

ing committed fraud as a teenager some 40 years ago and having 

spent the last 36 years of my life teaching at the FBI Academy and 

field offices of the Federal Bureau of Investigation. In my 36-year 

career, I have conducted over 3,000 lectures and written four books 

on these subjects. For the past 36 years, I have worked to try to 

prevent fraud, forgery, embezzlement, identity theft and other 

white collar crimes. 

One serious issue we face is financial fraud against the elderly. 

This can be perpetrated by family members, financial advisers, 

home healthcare providers, friends, scam artists, and others. As I’m 

sure you are all aware, in 2010 the Consumer Financial Protection 

Board estimated $2.9 billion was stolen from financially exploited 

elders, and the instances of financial theft from seniors grew 12 

percent from 2008 to 2010. 

This is probably a low estimate because many times the elderly 

are too embarrassed to admit that they have been defrauded, and 

therefore it goes unreported. Their families may not even be told. Last year, white collar crime in America reached $900 billion. Medicare fraud alone was estimated conservatively at $179 billion. 

The IRS paid out over $5 billion in fraudulent tax refunds filed by 

individuals using stolen Social Security numbers. 

I make my home in Charleston, South Carolina. Last month, 3.5 

million Social Security numbers and over 300,000 credit and debit 

card numbers were stolen from the South Carolina Department of 

Tax Revenue by criminals who hacked into the state’s computer 

system. It is believed that they not only stole Social Security numbers and credit card information, but also the entire return of each 

person who filed a South Carolina tax return. This means the 

criminals have the Social Security number of the dependents, the 

home address, bank account numbers, and copies of the W–2. 

What is truly amazing to an individual like me is that what I 

did 40 years ago as a teenager is 4,000 times easier to do today 

due to technology. Unfortunately, technology breeds crime, always 

has and always will. There will always be individuals who will use 

technology in a negative, self-serving way. 

I have always believed that the government should take the lead 

in education to combat this horrendous crime. However, sometimes 

it seems the government makes it easier for individuals to commit 

these crimes. For example, the Centers for Medicare and Medicaid 

Services uses Social Security numbers as part of the Medicare 

number. This means that anyone who sees the Medicare number 

can determine the Social Security number. 

In a hospital or medical setting, a worker would have complete 

access to a senior’s Social Security number, home address, date of 

birth, possibly credit card numbers, bank account, and other information. This threat of identity theft of seniors will not be alleviated 

until the Social Security number is removed from the Medicare 

card. 

The elderly are hungry for information but do not know about legitimate resources where they can turn for help. Numerous companies on television and radio, as well as talk show hosts, promote 

and market solutions which may or may not actually work. This is 

an example of the victim going for help but being victimized again 

by those companies that are claiming to help them. 
5 

Throughout my career, I have always believed that education is 

the best prevention. If you educate and explain to people their 

risks, in most cases they are smart enough to take that information 

and reduce their risks. I believe education is the only approach to 

help eliminate elder fraud. Education is not only important for our 

seniors, but it also helps bring awareness to all citizens so they can 

recognize the signs of fraud and know how to protect themselves. 

I believe that one of the most powerful tools at the government’s 

disposal is creative public service announcements that point out 

the most common scams and explain how to avoid becoming a victim. I recommend the government sponsor public service announcements, mailing stuffers and educational materials so that individuals can learn to protect themselves and their loved ones. 

Protecting one’s identity is an individual’s responsibility. If a person ages to the point that they cannot take care of their personal 

issues, then their family and friends should help take responsibility. Everyone has to be educated. Government regulation is not 

the answer. 

I recommend the following to seniors to protect their identity: review your credit report semi-annually; reconcile your bank accounts 

in a timely manner; be suspicious of calls, e-mails or letters asking 

for personal information; don’t give out your Social Security number—just because a form contains a space for your Social Security 

number doesn’t mean you have to provide it; invest in a micro-cut 

shredder. 

Finally, I believe that punishment for fraud and identity theft 

and recovery of stolen funds are so rare, prevention is the only viable course of action. Thank you. 

The CHAIRMAN. Thank you, Mr. Abagnale. 

Mr. ABAGNALE. Thank you, sir. 

[The prepared statement of Frank Abagnale appears in the Appendix on page 28.] 

The CHAIRMAN. Ms. Brown. 

STATEMENT OF KAY BROWN, DIRECTOR, EDUCATION, WORKFORCE AND INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC 

Ms. BROWN. Chairman Kohl, Ranking Member Corker, and 

Members of the Committee, thank you for inviting me here today 

to talk about our work on elder financial exploitation. My remarks 

are based on a year-long GAO study that was released today. 

As we all know, financial exploitation can undermine the dignity, 

health and independence of older adults. Of course, states are primarily responsible for protecting their older residents, and in our 

work we found states and local jurisdictions that were actively 

striving to do so. But the problem is large and likely growing, and 

states need help. Both the Older Americans Act and the Elder Justice Act have established a rule for the Federal Government in 

combating this problem, and for this report we looked at the efforts 

of seven Federal agencies in four states. 

Today I will cover three key areas where we identified a need for 

additional Federal attention: first, improving safeguards; second, 

promoting collaboration across systems; and third, increasing public awareness. 
6 

First on safeguards. Additional safeguards are needed to protect 

older adults from exploitation by those they trust, such as in-home 

caregivers and financial advisors. For example, financial advisors 

can recommend unsuitable or fraudulent investments, or they can 

use questionable tactics to market financial products to older 

adults. 

The Securities and Exchange Commission has published educational materials on this, and the Consumer Financial Protection 

Bureau is studying ways to improve financial literacy in this population. However, much more remains to be done. 

Also, we have previously identified the need to improve the process for background checks and oversight of court-appointed guardians. 

Next is collaboration across systems. Elder financial exploitation 

is a multi-faceted problem. It cuts across the social services, criminal justice, and consumer protection systems. Collaboration between social services and criminal justice agencies can improve outcomes, but it can also be very difficult to achieve and sustain because the two systems have very different cultures and missions. 

The Administration on Aging and the Department of Justice offer 

grants that require or encourage collaboration, but more information is needed on how to build these multidisciplinary teams. 

Interstate and international mass-marketing schemes also pose a 

challenge. They often target older adults and are particularly difficult for state and local law enforcement authorities to investigate 

and prosecute. Local officials would like more complete information 

on the best contacts within the Department of Justice to ask for assistance or to refer cases. 

Banks can be important partners with local social services and 

law enforcement agencies. They are well positioned to recognize, report and provide evidence on elder financial exploitation. However, 

local officials told us that banks generally under-report potential 

cases, in part because the staff may not be aware of telltale signs, 

or some may misunderstand or be concerned about Federal privacy 

laws. 

Some states require training for bank employees on how to recognize these crimes, and the Administration on Aging is considering 

collaborating with a large national bank to develop a training curriculum. 

Lastly, on public awareness, the best way to fight this problem 

is through prevention. Older adults and the public in general need 

more information about what constitutes financial exploitation and 

how to avoid it. However, local officials told us it’s difficult for them 

to conduct public awareness campaigns given their scarce resources. 

Each of the Federal agencies we reviewed independently produces educational materials consistent with its own mission. However, these efforts could be more effective if they were part of a 

broader coordinated approach. The Federal Government is well positioned to develop such a coordinated, multi-faceted campaign. 

In conclusion, elder financial exploitation is a complex, nationwide problem. Combating it effectively requires a concerted, ongoing effort on the part of states and localities, as well as the support 

and leadership at the Federal level. The Federal agencies we re-
7 

viewed are each taking steps to address this problem, but a more 

cohesive and clearly articulated national strategy is needed, and 

the recently formed Elder Justice Coordinating Council can be the 

vehicle for defining and implementing this strategy. 

This concludes my prepared statement. I’m happy to answer any 

questions you may have. 

[The prepared statement of Kay Brown appears in the Appendix 

on page 34.] 

The CHAIRMAN. Thank you, Ms. Brown. 

Mr. Humphrey. 

STATEMENT OF HUBERT ‘‘SKIP’’ HUMPHREY III, ASSISTANT DIRECTOR, OFFICE FOR OLDER AMERICANS, CONSUMER FINANCIAL PROTECTION BUREAU, WASHINGTON, DC 

Mr. HUMPHREY. Thank you very much, Chairman Kohl and 

Ranking Member Corker, to the other members of the Committee. 

Thank you for the opportunity to testify today on the Office for 

Older Americans at the Consumer Financial Protection Bureau and 

its work to address the devastating problem of elder financial exploitation. 

Mr. Chairman, I also want to thank you for your longstanding 

dedication and the important role that you’ve played in enhancing 

the well-being of our older citizens. 

For the past year, I have been privileged to lead the Office for 

Older Americans. Our statutory mandate covers two broad areas: 

first, protecting consumers age 62 and over in the financial marketplace; and secondly, in enhancing their later-life economic security. 

In our first year, we’ve made preventing and detecting and redressing elder financial exploitation job number 1. In doing so, we 

have recognized that collaboration is critical on the local, state and 

national levels, and between public and private sectors. 

To jumpstart and foster these collaborative efforts, we have traveled throughout the country to meet state, local and tribal officials, 

including Attorneys General, financial regulators, Adult Protective 

Services administrators, commissioners on aging, chief justices, 

court administrators, and tribal elders. We have also engaged with 

non-profits, community organizations and industry groups to explore ways to help and to partner with them. For example, we participate in a working group with the Financial Services Roundtable 

to enhance the capacity of financial institutions to report suspected 

elder financial abuse. 

In addition, we have been actively engaged with our Federal 

partners. Last month, as was mentioned, was the inaugural meeting of the Elder Justice Coordinating Council, an 11-agency body 

convened to shine a light on the disastrous impact of financial exploitation and to catalyze the development of a prevention strategy. 

At the meeting, we heard some important themes from national 

experts. We heard that older Americans are victimized by a broad 

range of perpetrators; collaboration is critical; diminished capacity 

is truly the 800-pound gorilla in the room. We need more and better quality data, and we need a broad-scale public education campaign to raise the awareness of elder financial abuse and what to 

do about it. 
8 

The CFPB already has initiatives underway that address issues 

flagged at the Council meeting. We are developing ‘‘how-to’’ guides 

for agents under powers of attorney, guardians, trustees, Social Security representative payees, and VA fiduciaries. We are producing 

a guide to help senior housing, assisted living and skilled nursing 

facilities to identify and intervene in exploitation cases. Our Money 

Smart for Older Adults education program, in collaboration with 

the FDIC, will focus on preventing, recognizing and reporting elder 

financial exploitation. 

We are working with several states to create and sustain coalitions for community education, public awareness, enhanced response, and increased prosecution; and we’re developing strategies 

for communicating to financial institutions that the Gramm-LeachBliley Act generally does not prohibit them from reporting suspected abuse to law enforcement and APS agencies. 

Congressional leadership and support is critical to implementing 

a multi-faceted solution to the serious problem of elder financial exploitation. We look forward to continued information sharing with 

members of Congress on this important topic and the CFPB’s contributions. 

Thank you, Mr. Chairman and members of this Committee, for 

the opportunity to visit with you on this. 

[The prepared statement of Hubert ‘‘Skip’’ Humphrey III appears 

in the Appendix on page 42.] 

The CHAIRMAN. Thank you very much, Mr. Humphrey. 

Mr. Smocer. 

STATEMENT OF PAUL SMOCER, PRESIDENT, BITS, FINANCIAL 

SERVICES ROUNDTABLE, WASHINGTON, DC 

Mr. SMOCER. Thank you, Chairman Kohl, Ranking Member 

Corker, and members of the Committee, for providing this opportunity for us to speak on the subject of financial exploitation of 

older Americans. 

My name is Paul Smocer, and I am the President of BITS, the 

Technology Policy Division of the Financial Services Roundtable. 

By 2030, the number of Americans aged 65 and older is projected 

to double to 71 million, roughly 20 percent of the U.S. population. 

With this increase in the number of older Americans, the threat of 

financial exploitation is only increasing. 

The Roundtable and its member companies are committed to encouraging their employees comply with high standards of conduct 

when providing financial advice to all customers, including older 

Americans and their families. Helping ensure a secure financial 

system and retirement for millions of Americans is central to the 

mission of the financial services industry. 

Since many older customers still prefer to conduct transactions 

in person, financial services employees can often detect changes in 

an older customer’s behavior and have the opportunity to react appropriately in the event of potential exploitation. In identifying and 

reacting to cases of suspected abuse, it is essential for the institutions to work with Adult Protective Services and local law enforcement. 

To accomplish this, many institutions participate in both local 

and regional task forces composed of all of these groups. During 
9 

these meetings, institutions will share trends, suspect information, 

and best practices. Through this active engagement and partnership, cases are able to be resolved more quickly. 

Institutions also file Suspicious Activity Reports to the Financial 

Crimes Enforcement Network. 

For decades, financial institutions have been at the forefront of 

fraud detection, utilizing sophisticated technology, modeling, training and education. These resources and techniques are employed in 

protecting older Americans. Using a variety of safeguards, financial 

institutions make every attempt to ensure the reliability and security of financial transactions, as well as to protect financial privacy. 

Education of all stakeholders is critical for preventing financial 

abuse. Many financial institutions have extensive programs to educate both employees and customers on detecting abuse against 

older Americans, and steps to secure accounts from the lure of 

fraudsters. 

Working closely with community organizations, financial institutions host panel discussions and community events to educate seniors and their caregivers about the risk of elder financial abuse. 

These efforts provide older Americans and their advocates educational resources to not only recognize financial elder abuse, but 

also to take proactive steps to protect oneself and one’s assets. 

Working with our member institutions, the Roundtable’s BITS 

organization released a white paper to help financial institutions 

and their customers identify and combat elder abuse. In addition, 

the Roundtable participated in its Seventh Annual World Elder 

Abuse Awareness Day this past June, providing speakers on the 

topic of elder financial abuse. 

Currently, the Roundtable and its members have committed resources to a working group focused on developing a structure for 

training financial institution staff on elder fraud trends and internal procedures for reacting to suspected elder financial abuse. The 

group will also work with financial institutions and, as Skip mentioned, in collaboration with groups like CFPB to develop broader, 

sector-wide, consumer-facing awareness and education programs. 

In discussing this issue more generally, the group has identified 

a number of areas where impediments exist to improved prevention 

which require the assistance of Federal agencies to help resolve. 

We recently presented these impediments and recommendations for 

improvement to the Elder Justice Coordinating Council during its 

inaugural meeting. 

My written comments provide additional detail on these recommendations, but they cover a variety of areas including clarifying existing law related to fraud monitoring capabilities and responding to transaction requests involving suspected fraud; uniform reporting processes and protection for reporting parties; clarification and standardization of reporting requirements across various jurisdictions; and licensing of financial professionals serving 

the elder community. 

In closing, please accept my thanks for the opportunity to offer 

our thoughts to you today. We recognize the importance of this 

issue and look forward to continuing to work together with the 

Committee and the member agencies of the Elder Justice Coordinating Council on this important issue. Thank you. 
10 

[The prepared statement of Paul Smocer appears in the Appendix on page 46.] 

The CHAIRMAN. Thank you, Mr. Smocer. 

Mr. Greenwood. 

STATEMENT OF PAUL GREENWOOD, DEPUTY DISTRICT ATTORNEY, HEAD OF ELDER ABUSE UNIT, FAMILY PROTECTION SERVICE, SAN DIEGO, CA 

Mr. GREENWOOD. Thank you, Chairman Kohl. Good afternoon to 

you. If I may be permitted to deviate from my written remarks, I 

feel like I’m sort of the closing argument prosecuting in front of the 

jury this afternoon. What has come across is very clear. The speakers have been talking about education and collaboration and making safeguards, and one thing that Skip Humphrey mentioned was 

increased prosecution. 

I am privileged to be able to be head of an elder abuse prosecution unit in our office in San Diego for the last 17 years. It’s been 

the most rewarding, challenging, and equally frustrating part of 

my 34-year career as a lawyer. 

But I’m also fortunate that, working in California, we have seen 

evidence of this collaboration in increased awareness over the last 

several years. For example—and I owe a great deal of thanks to 

Adult Protective Services, who really have taken the lead in California in so many initiatives. We developed what are called FAST 

teams, Financial Abuse Support Teams, that bring in several times 

a year members from the community—professionals, bankers, lawyers, law enforcement, Adult Protective Services—to talk over 

these issues and to study trends and to learn from one another in 

how we can improve our collective response to these cases of financial elder abuse. 

We’ve seen popping up over the last five years forensic centers 

for elder abuse in California, and I have to pay tribute particularly 

to the one in Orange County led by the premier expert in this 

country, Dr. Laura Mosqueda, and it is a tremendous resource to 

be able to call up that center and ask for advice from a medical 

expert regarding a victim with dementia or Alzheimer’s. 

And then thirdly, in 2007, California passed a law that required 

all bank tellers and credit union tellers to be mandated reporters 

of suspected financial exploitation. Because of that, we’ve seen a 

huge increase in the number of reports being cross-reported to law 

enforcement and Adult Protective Services. 

And then finally, Operation Guardian was a program initiated by 

the California Attorney General’s Office which makes surprise visits, sometimes at dawn, to various nursing homes around California, and because of those surprise visits, many cases of financial 

exploitation have been discovered in these facilities where residents 

have been taken advantage of. 

But I also want to comment upon increased prosecution, because 

whilst these other initiatives are excellent, I believe the best form 

of prevention is to tell these crooks out there that if you do mess 

with elders and try to rip off an elder, a prosecutor somewhere is 

going to come after you and prosecute you to the fullest. 

It starts with the elected district attorney, and I’m so glad that 

I have a boss, Bonnie Dumanis, who has not only allowed me to 
11 

come today, but it shows the importance that we place in our office 

on this crime of financial exploitation. But gradually we’re seeing 

across the country more and more prosecutors understanding that 

not only are these crimes provable, but the juries get it, and there 

are many misconceptions out there about working with elderly victims. The biggest one I always hear is, well, they have failing 

memories. But that’s not the case so often. So often now, victims 

are articulate, they are good historians. 

But in those cases where we have victims on the stand who demonstrate a lack of memory, that actually enhances the case for the 

jury because the jury gets to see exactly why the defendant targeted this elder for their diminished capacity or their forgetfulness. 

So what we are looking for is, across the whole of the states, 

more and more prosecutors to become emboldened to take on these 

cases. We want police departments throughout the country to develop specialized units. San Diego, fortunately, developed several 

years ago a police department where we have six detectives working nothing but elder abuse cases. Can you imagine the quality of 

these cases that come to my desk after several years? The detectives absolutely believe in the work they do. They bring me good 

cases, and we present these cases to judges and juries all the time, 

and in most cases we get convictions. 

So the message I have is let’s collaborate. We need to talk more 

as prosecutors to Adult Protective Services. We need to give them 

more resources. We need to have police officers talk with Adult 

Protective Services and with prosecutors, get more education out 

there for elders, get more training for bank tellers and credit 

unions. But together, I think we can make a difference, particularly 

in the courtroom, and get more and more convictions, and get these 

predators behind bars. Thank you. 

[The prepared statement of Paul Greenwood appears in the Appendix on page 57.] 

The CHAIRMAN. Thank you. 

For each of you, we believe and heard that only a fraction of 

cases of elder financial fraud actually get reported. What can government do to encourage people to report cases of elder financial 

fraud? 

Mr. Abagnale. 

Mr. ABAGNALE. Well, sir, I have to first believe that I think that 

someone is going to take action, as you just heard the district attorney say that about prosecution. You know, crime has become, especially in the realm of fraud, overwhelming. Federal law enforcement agents are usually restricted from investigating crimes under 

$100,000 in face value. Most U.S. Attorneys won’t prosecute cases 

under a quarter of a million dollars in face value. Consequently, 

criminals know that if they stay under these thresholds, they are 

most likely going to get away with it. 

And so it’s very frustrating not only for the law enforcement side 

of it, but for individuals when they know who did it, they have all 

the evidence that they did it, but can’t get anyone to act on it or 

do anything to bring these people to justice. 

So I think we have to do a better job of educating people how 

to protect themselves so that they don’t become victims. Once 

you’re a victim, you usually are never going to get your money 
12 

back. So it would be much wiser not to become a victim to begin 

with. So this is why I’m a big believer in education. 

I do believe the government needs to fix some of the things like 

the Medicare card. As you know, there’s a bill, S. 1551, which 

would turn the Medicare card into a smart card, which the military 

currently uses. We have 20 million of those cards currently in use. 

Not one has been counterfeited. So I would like to see the government at least do a pilot program to bring the Social Security number off the Medicare card, which will eliminate it finally from all 

of the identification documents the government has, and come to 

a smart card that will help protect as well. 

So it’s a little bit of that, more enforcement and, of course, a 

great deal of education. 

The CHAIRMAN. You say that less than $250,000 will not be prosecuted? 

Mr. ABAGNALE. Most U.S. Attorneys, because of the volume of 

fraud and crime, they take the highest dollar priority crimes, the 

person who has stolen $7 million, $8 million, $20 million, and go 

after those individuals and prosecute those cases. They’re understaffed, under-manpowered. They don’t have the ability to prosecute a lot of those cases. Certainly, local law enforcement and district attorney’s offices in counties and cities probably do a much 

better job and have set aside teams of people and attorneys to work 

on those cases. 

But again, it’s very frustrating when you’re a law enforcement 

person or you are the victim and you know what happened, you 

know who did it, you have all the evidence that there is, but you 

can’t get anyone to act on that evidence. 

The CHAIRMAN. Thank you. 

Ms. Brown. 

Ms. BROWN. I think I’d like to pick up on the public awareness 

theme. I think it’s important both to help victims understand and 

try to avoid what may be happening to them, but also to help people around them better be able to identify what may be happening 

and feel the confidence to report it. So it’s both seeing what’s happening and then being able and willing to report it and knowing 

where to go. 

The CHAIRMAN. All right. 

Mr. Humphrey. 

Mr. HUMPHREY. Thank you, Mr. Chairman. You know, time and 

again I’ve had the opportunity to visit with senior groups, and I 

usually ask the question: How many of you have had something 

like elder financial exploitation, a scam, happen to you? All the 

hands go up, or they know somebody that has had that happen. 

And I say how many of you know of someone that’s in your family? And some hands go up. 

Part of the challenge here is to get people to speak up and speak 

out and to encourage them to report it. What we have heard from 

the District Attorney is terribly important, that we encourage law 

enforcement to really begin working in this area. 

The educational part of this and the prevention part are terribly 

important. That’s why we’ve partnered with the FDIC, with their 

Money Smart program. It’s a well-known program that reaches out 
13 

to a very broad range of the population and now will also focus on 

older Americans. 

The CHAIRMAN. Very good. 

Mr. Smocer. 

Mr. SMOCER. By the time you’re the fourth witness, you kind of 

have much of the same thing to say. But I think education is probably key. Obviously, we’re trying to do improved education within 

the financial services community itself. So the tellers and kind of 

the folks at the front line that elders come in and speak to are 

more aware of not only the kinds of scams but how to react when 

they suspect that there is some scam or fraud situation going on. 

As Skip mentioned earlier, we’ve been working with CFPB and 

more broadly with the Elder Justice Coordinating Council around 

the issue of clarifying current law with regard to privacy, because 

that is a bit of a conundrum in some cases where bank employees 

are afraid they’re going to violate the customer’s privacy rights by 

somehow reporting a situation to someone else. So I think it is important that we clarify that. 

I think the consumer education is key, but I think Kay made a 

key point. As we think about this, I think one of the concerns we 

have is that in many cases the elder him or herself may not be at 

a level of capacity that they can actually understand the education. 

So education to caregivers, education to adult children of elderly 

parents I think is also critical. 

And then I think in terms of law enforcement, improved reporting around these cases and consolidation of some of the many databases that tend to exist today, this was an item that we brought 

up in front of EJCC, that a lot of the agencies individually are 

doing a relatively good job at capturing information, but having a 

consolidated kind of reporting mechanism so that, for example, as 

Frank mentioned, a prosecutor can see that he or she can actually 

make a case because when he looks at the fact that this fraudster 

is committing crimes against multiple individuals as opposed to 

looking at each case one off, I think would help build the interest 

of prosecutors and law enforcement. 

So I’ll stop there and let Paul speak. 

The CHAIRMAN. Mr. Greenwood. 

Mr. GREENWOOD. Thank you. One of the most successful initiatives we were part of with Adult Protective Services was called Silence Isn’t Golden. So we launched this campaign with posters and 

public service announcements, telling the public that the best thing 

we can do is not stay silent about this hidden crime. If you suspect 

that somebody in our family or in your street, in your neighborhood, in your church is a victim, you need to call this number, and 

we encourage people to do it because it’s anonymous. They don’t 

have to say who they are. 

Secondly, we had a very successful campaign called Protect Yourself and Your Wallet. We went around to various libraries, and we 

got a female 70-year-old black belt to do a 20-minute course on protecting the seniors when they’re out in the streets and the shopping 

malls, and then I came along and did a 15-minute Top Ten Tips 

on Financial Security, and that really seemed to help a lot. 

But thirdly, one thing I always try to convince seniors of is, look, 

we understand why you don’t report, or your families don’t report, 
14 

because you’re embarrassed. But there’s also a fear involved, that 

seniors fear that if they report they’re a victim, that somehow 

somebody is going to come and take control of their life and their 

finances. So we try to allay that fear and convince them, no, we’re 

not concerned with your independence; we only want to go after the 

independence of the crook who is stealing from you. I think when 

that message gets across, and when there’s a consumer confidence 

that if they do report, something will happen, then there’s a difference. 

I agree with what Frank is saying. If the citizens out there think 

‘‘what’s the point?’’ because law enforcement and the prosecutors 

aren’t going to do anything about it, we’re going to fail. 

The CHAIRMAN. Very good. 

Senator Corker is next, but I would like just a couple of minutes 

because Senator Wyden has said he needs to leave. Would you like 

to ask a question? 

Senator WYDEN. If that would be all right with Senator Corker. 

Mr. Chairman, Senator Corker has been here a long time. If he has 

just a couple of minutes worth, I’d certainly—because he’s been 

waiting a long time—let him ask. 

Senator CORKER. It’s okay. 

The CHAIRMAN. Go ahead, Senator. 

Senator WYDEN. All right. Thank you. Thank you both. I also 

want to note that I guess there’s been some kind of informal agreement, almost a gag order, that we’re not allowed to go into Chairman Kohl’s accomplishments. 

The CHAIRMAN. Correct. 

[Laughter.] 

Senator WYDEN. But everybody knows that I never go along with 

these gag orders. 

[Laughter.] 

I only want to say that it’s my intent to give a speech on the floor 

of the United States Senate when we get back to outline the accomplishments of Senator Kohl, this thoughtful, modest man, over the 

last years through this Committee, because it is an extraordinary 

record. I’m going to semi-respect the gag request for purposes of 

this afternoon, but I hope folks will stay tuned because we’re going 

to talk on the floor of the United States Senate about the extraordinary record of Chairman Kohl, and I know Senator Corker very 

much agrees with this as well. 

I just wanted to ask a couple of quick questions. 

First, I think we all know, and it’s something I’ve felt strongly 

about since the days when I was co-director of the Gray Panthers, 

that this history of stealing and ripping off seniors is a long one, 

and the bad guys, they’re pretty savvy, and every generation seems 

to be savvier than the previous one. 

So what we’re up against is constantly trying to stay out in front 

of them as they turn to new techniques, and I wanted to ask just 

a couple of questions because my colleagues are being so patient. 

The first I think I want to direct to Skip Humphrey, who has 

been doing wonderful work for seniors for lots of years, and we’ve 

worked together on a number of issues. My sense is a lot of the bad 

guys, a lot of the worst actors are now shifting to online exploi-
15 

tation of seniors. It’s almost like they rattled those old windows, 

you all closed some of them, so they went to new ones. 

If you could, General Humphrey, give us a sense of what we’re 

doing to beef up our efforts to deal with online exploitation of seniors, if you would. 

Mr. HUMPHREY. Thank you very much, Senator. First of all, of 

course, we’re working as closely as we can with our colleagues at 

other Federal agencies, and with state and local efforts in this 

area. But one of the things that is happening as the baby boomers 

shift and as another generation comes forward is that more and 

more people are comfortable using the Internet. Therefore they become more vulnerable, in a sense, to that kind of exploitation. 

One of the things is to just help citizens understand what the 

protections are. The first thing to understand, the most basic, is if 

it sounds too good to be true, it probably is. No matter whether it’s 

on the Internet or whether it’s coming through the door or in the 

mail or any other thing. It’s just to understand that if something 

really sounds like something positive, you yourself are probably the 

best defense. 

Secondly, of course, as was indicated, this whole issue of personal 

I.D. is very, very important. Our efforts will be looking towards 

that as it relates to financial transactions, and certainly there’s a 

broader range as was indicated by the testimony here. 

The third area that I would suggest is that we are going to be 

going online with these how-to guides for fiduciaries. Many times 

people are identified in power of attorney documents as agents, and 

they don’t know the first thing about what they’re supposed to do, 

or what the risks are with regard to the resources that they are 

supposed to manage for another person. So having those guides 

available to educate people can be very important, particularly as 

it relates to the congregate care facilities and those who manage 

the congregate care facilities. 

So those are just some of the things that we’re working on within 

the framework of the new Internet age. 

Senator WYDEN. Good. 

A question for you, Mr. Abagnale, and I want to give credit 

where credit is due. The Medicare card legislation, which I am the 

Democratic sponsor of, is really the work of Senator Kirk, Senator 

Kirk of Illinois. He could not be here today, but I think he’s come 

up with a logical bipartisan approach, and we’re going to do everything we can to advance his bill. 

My question to you on that legislation is what are the consequences of not doing it? What are the consequences of not having, for every Medicare beneficiary in the country, a way to make 

sure that their name and their full Social Security number is there 

to see and it is, in effect, something that can’t be ripped off and 

stolen the way it is? 

Mr. ABAGNALE. Well, as I mentioned earlier, I think that the 

Medicare card with the Social Security number followed by a letter 

is just an open invitation for criminals. They know that if they see 

the card—— 

Senator WYDEN. It’s the status quo. 

Mr. ABAGNALE. Right, as it is today. When you present the card 

at a doctor’s office, unfortunately I think that many people believe 
16 

that doctors’ offices close up their files at night. Most doctors’ offices just have straight file cabinets that do not lock down at night. 

Consequently, there are people who tell the janitorial service, ‘‘if 

you take a Post ‘Em and write down the person’s name, address, 

date of birth off the copy of their Medicare card that the doctor 

made, and their Social Security number, I’ll give you $100. So if 

you give me one Post ‘Em, $100. You give me five Post ‘Ems, $500.’’ 

Obviously, it’s very enticing to people. 

So as it is now, what I’d like to see, as we have done in many 

states, we’ve taken the Social Security number off the driver’s license. We have started to remove it from college campuses, from 

identification cards. I would like it if we removed it from our military cards for identification. The one final place that we have left 

that we have not removed it is on the Medicare card. 

So I think it would be extremely wise for the government to close 

that final loophole, and that will go a great long distance to protecting people from having their identity stolen. 

Senator WYDEN. Thank you. I’m going to submit two questions 

for the record because Senator Corker has been so kind in terms 

of giving me this time. One will be a question for you, Mr. 

Abagnale, on the question of opening up the Medicare database. I 

think you know Senator Grassley and I believe that if you’re ever 

going to really get a better handle on this relatively small number 

of physicians in particular who are exploiting the program, you’ve 

got to get access to that database. I’ll submit it for the record. 

And for you, General Humphrey, I’m going to ask you a question 

about the question of living facilities and looking at ways to better 

control those who somehow find a way to exploit the residence. 

This also touches on an issue Chairman Kohl and Senator Corker 

know about, and that’s the question of these pension poachers for 

veterans. 

So I will, just in the interest of time, submit that to you, General 

Humphrey; one for you, Mr. Abagnale. 

Senator WYDEN. And to my friend Bob Corker, thank you for giving me the time. 

Everybody stay tuned when on the floor we can list the gag order 

and we can talk about Chairman Kohl and go through his record 

the way I think it ought to be appropriately discussed. Thank you. 

The CHAIRMAN. Thank you, Senator Wyden. 

Senator Corker. 

Senator CORKER. Thank you, Mr. Chairman, and thank each of 

you for your testimony. This is a great way to round out this year 

and start next year hopefully with a focus on this. 

But, Mr. Abagnale, I was interested in you talking about technology and that it’s 4,000 times easier to do something today than 

it was 40 years ago, or whatever the number was. In that same 

light, I would suppose there are, through technology, all kinds of 

ways today to also detect that, and I wonder if you might—in other 

words, it’s easier with technology to commit fraud, but I assume 

there are also ways of detecting that. 

I wonder if you might talk about some of the breakthroughs that 

exist there from the standpoint of using technology to keep this 

from happening in the first place. 
17 

Mr. ABAGNALE. Yes, sir. Let me clarify what I mean by that. 

Forty years ago, for me to forge a check, I needed a Heidelberg 

printing press. The press cost a million dollars 40 years ago. It was 

90 feet long, 18 feet high. It required three journeyman printers to 

operate it. So as they showed in the movie, I built scaffolding on 

the side of the press to eliminate the two other printers. I had to 

learn to do color separations, negative plates typesetting. I used 

chemicals. 

Today, one simply opens a laptop, picks a victim out of corporate 

America, Delta Airlines, catches their logo, puts it on a diagram of 

a check in full color, and in 15 minutes has created a beautiful 

Delta Airlines check. 

Forty years ago, I wouldn’t know where Delta Airlines banked. 

I wouldn’t know who the authorized signer of Delta Airlines checks 

was, and I certainly wouldn’t know their bank account number. 

But because we live in a too-much information world today, all I 

have to do is call Delta Airlines corporate office and ask to speak 

to someone in their accounts receivables and say that I would like 

to pay a statement, but I would prefer to wire them the funds, and 

they would give me wiring instructions, which means that they 

would tell me where they bank, on what street, what city, routing 

number, account number, and all the information I need. I would 

hang up and call back and ask for corporate communications today 

and ask for a copy of the company’s annual report, and they would 

send it out to me, but on page 3 would be the signature of the 

Chairman of the Board, the CEO, the CFO, the Treasurer, the 

Comptroller, and with white glossy paper with camera-ready ink, 

I’d just scan it and put it on a check. 

So the technology has made it a lot easier, and social engineering 

has just changed. It’s gone from a telephone now to a computer. It’s 

the same thing, seeking information from individuals. 

So I think we have technology just like the Smart Card, and 

technology that the government has come up with for our new currency since 1996 to make it much more secure. We’ve seen a great 

decrease in the replication of our currency. We have the technology 

to be able to prevent some of these things. Of course, these things 

cost money. They take time and research. But you only fight technology with technology. So you always have to be one step ahead. 

So you look at the problem and you come up with a solution. You 

can’t sit on the solution. You have to then be working on the next 

solution forward. 

But certainly American know-how and American technology can 

prevent a great deal of these things from occurring. We just have 

to continue to work on it. 

Senator CORKER. And does it appear that the enforcement agencies that care about these things or are doing those things to stay 

one step ahead? 

Mr. ABAGNALE. I’m certain that they are. What concerns me is 

you rob a bank today and you get $7,500 or the most the teller 

might have in their teller window, $4,500, and you might go to jail 

for 20 years when they catch you. You rob a car, you take it across 

the state line. Both the car and the bank were insured. They got 

their money back, if they didn’t get their money back from the 

thief. 
18 

But when you go out and you steal someone’s life savings, you 

take their pension, you take their entire retirement, their entire future, they have to go live in poverty because of that crime. It is ridiculous that that person walks away with a slap on their hand or 

ends up with 18 months in a prison. That’s just absurd. 

I think we have to see it for what it is. It is a very serious and 

devastating crime and should be looked upon that way by law enforcement and the prosecutors who prosecute the crime, and the 

judges who render those sentences to those criminals. They are 

much more devastating than the guy who might rob the bank or 

steal the car. 

Senator CORKER. And to whoever wants to answer this, what is 

the order of magnitude of crimes against elderly citizens that are 

committed by those that are familiar to them, that are relatives or 

friends, and that that is perpetrated by people totally unknown to 

them and from the outside? What would be the percentages of 

each? 

Mr. HUMPHREY. Senator, my best understanding is that over 5% 

of adults aged 60 and over are victims of financial mistreatment by 

a family member. It’s a very significant number, and it’s—— 

Senator CORKER. Five percent is by people who are familiar with 

the—— 

Mr. HUMPHREY. That are familiar, absolutely. I will give you an 

example from a conversation that I had in your state, Senator, with 

a group of elderly folks who were helping one another deal with 

some of these problems. I asked, well, how are we going to get people to report them? That is a challenge because it’s an individual 

that they know, and probably a member of their family. They don’t 

want to report them to law enforcement, and personally the person 

reporting is embarrassed that it’s happening. I said, well, how 

would you see this happening in your family? 

This woman said—she nailed it right on the head. She said, 

Skip, I’ve got seven kids. I love every one of them, but I only trust 

three. 

[Laughter.] 

Mr. HUMPHREY. In a sense, she was making a judgment on who 

was to be the person that she might look to. 

Part of the effort here needs to be that education of helping people understand that they need to make wise choices with regard to 

those who are going to be their caregivers, formal or informal. The 

other part is just as we have heard, to have the government structure to be able and ready to take on that responsibility once a report is made. Part of the challenge here is to find out where and 

how best to get that reporting. 

Another example, if I could just take a moment, Senator, was an 

opportunity when I was visiting with tribal elders. One of the ways 

they come to grips with this within the framework of a family is 

the Navajo Nation has developed the concept of a peace council. It 

brings together individuals within the tribal community, and law 

enforcement to work together to develop the resolution of the problem, to stop the theft, and at the same time to work through a way 

in which to deal with the abuse that is taking place. 
19 

So we’re looking at a wide variety of approaches of how to come 

to grips with this, including making sure that there is the opportunity to report directly to law enforcement. 

Mr. GREENWOOD. Senator, if I could just also add, part of the 

problem is that we don’t really know the answer to your question 

because so many cases are unreported, and therefore undetected. 

And the cases that we know of that come to my office, I would say 

the majority of physical abuse cases are committed by someone 

who is close to them. The majority of financial abuse cases are committed not by a family member, although some are, but by someone 

who has got into their life, a caregiver, an unlicensed contractor, 

a professional advisor, somebody who has built up this relationship 

of trust with the victim. 

But then there’s this whole myriad of unknown predators out 

there online who serve behind anonymity, overseas, who are conning their victims. The victims are wiring the money, but they 

never tell us because they’re too embarrassed. So we really don’t 

have a good handle on this. 

Senator CORKER. Mr. Smocer, I’m not much of a buyer, but I 

sometimes end up with a credit card, and I hadn’t been in for a 

while, and it’s frustrating as heck to be standing there at the teller 

and the person with an American Express gets on the phone. I 

mean, it’s a major pain. I’m sure most people have witnessed that 

before. 

And I guess, as you look at some of these transactions that would 

occur in financial institutions where maybe something large is happening that’s unusual in a senior’s account, you would think that 

there’d be some hurdle that people would have to go through for 

money just to, all of a sudden, $100,000 or whatever the number 

is, to go out of someone’s pension. 

I’m just wondering why there aren’t mechanisms like that that 

are employed in many other areas to keep that kind of thing from 

occurring. 

Mr. SMOCER. Well, first, there are mechanisms, and the example 

you gave of the credit card situation is an example of a mechanism. 

You’re in a strange town, you’ve never used a card there before, 

that’s why the clerk ends up asking you to get on the phone to 

identify yourself. So there are the same kinds of monitoring systems and, to answer your other question, the use of technology to 

try to prevent fraud have been getting more and more sophisticated 

as time goes on. 

Now, one of the things that we talked to the Elder Justice Coordinating Council about is really two concerns that I think apply 

in this situation. Number one, there is a concern, and we asked for 

clarity around the question of—because some institutions have the 

question can we really divide out the elder population from the rest 

of our consumer population and treat it in a slightly different way. 

Some are concerned of how that deals with age discrimination 

laws, because in theory you’re not to discriminate in any way 

against the elderly, but in a way that you want to positively carve 

them out, is that okay to do, because there we could add some additional monitoring. It might be lower dollar threshold limits on 

transactions involving the accounts of the elderly. It might be more 

follow-up when, for example, there’s a change of address associated 
20 

with an elder’s account, that suddenly you want to verify with the 

elder that, in fact, they’re the one who caused the change, it’s not 

some fraudulent situation that’s occurring. 

The other thing they talk about which is a bit of a conundrum 

is that ultimately and legally, the account is the elder’s account. So 

in many cases, even when a suspicion of fraud is there, the question of can you legally stop this person from doing with their legally own money what they choose to do. One of the recommendations that we came up with and talked to the Council about was 

the ability to actually put temporary holds on a transaction. I’m 

sure Paul would particularly mention that in some of these situations where elders want to come in and wire money overseas because there’s a scam involving—one of them being the purchase of 

a bride, as an example. Once that money is wired, it’s virtually impossible to get it back, but it is the customer’s money. 

Ultimately, no matter how much you want to try and convince 

them that maybe this is something they shouldn’t do, you contact 

APS, by the time the customer wants the transaction executed, it 

may be too late. So having a way in a suspicious situation to be 

able to say, ‘‘Yes, Mr. Smith, we’ll go ahead and do that’’, but hold 

on the transaction for a couple of days’’ until we can get APS or 

law enforcement involved would be helpful. 

Senator CORKER. There’s just one other question, Mr. Abagnale. 

You mentioned the car theft issue and going across state lines, 

doing a couple of things, and you’re right, people end up having insurance, they get their money back. Are you alluding to the fact 

that there should be a different sentence, if you will, for these 

types of crimes than exist right now? What were you trying to get 

at there? 

Mr. ABAGNALE. I was trying to say that, unfortunately, white collar crime in America, whether it be someone on Wall Street or it 

be somebody who is stealing from the elderly or someone stealing 

identities, are looked upon as a crime where there’s really no victim, nobody was physically hurt, and consequently a lot of times 

it’s not treated very seriously. I think that’s a big mistake because 

I think they are extremely hurt when someone has lost their life 

savings and their pension from those crimes. 

So I think we have to look at white collar crime as an extremely 

fast-growing crime. I mean, fraud in this country has become overwhelming, almost impossible to enforce any longer. And consequently, I think punishment for these types of crimes has to be 

more severe. 

It is interesting that I committed these crimes 40 years ago, writing bad checks. I was a teenager, or when I was caught I was 

under 21 years old. A Federal judge in Atlanta sentenced me to 

prison for 12 years. I served four of those 12 years, having already 

served a year over in Europe when the Federal authorities returned me to the United States. That would have been considered 

a harsh punishment back then. 

But the truth is had they caught me today for the same thing 

I had done 40 years ago, I probably would end up with community 

service or probation, or probably 18 months in a Federal prison. So 

I, having served the time, know that those types of crimes where 

people’s money is taken from them, people need to be punished for 
21 

those crimes and need to be sent to prison for those crimes and not 

be treated as if there was no victim or it was a harmless crime. 

Senator CORKER. Most of those sentencing laws, are they state 

or are they Federal? 

Mr. ABAGNALE. Most of them now don’t—whether Federal or 

state, there are no determined laws that says a judge has to sentence someone for a certain amount of time to jail. It’s usually up 

to the judge’s discretion for the crime. So if the judge looks at it 

as somebody wasn’t physically hurt, nobody was really beat up or 

taken advantage of physically, the judge may tend to give it a lenient sentence. 

I do go out and speak to U.S. Federal judges at their annual 

meetings and some of their semi-annual meetings, and in the Q&A 

I always bring up the importance of looking at these crimes in a 

different light, that they are very serious crimes, and I think that 

in America we are slowly starting to see, because of the Madoffs 

of the world, and because of the Enrons and WorldComms and 

Tycos and Arthur Andersons and all the things we’ve gone through 

over the last 10 years, I think that people are starting to realize 

that these types of crimes are very serious, both on the law enforcement side, on the prosecution side and even as American consumers we’re starting to realize that these are devastating crimes 

and people need to be brought to justice and they need to be punished for those crimes. 

Senator CORKER. Did you want to say something, Skip? 

Mr. HUMPHREY. Senator, I would just say that I’m aware that 

there are some states that do have enhanced penalties for the kind 

of theft that we’re talking about against older Americans. There 

are some states that have that. There are also some states that 

provide for an accelerated process in their prosecution through 

docket control. So there are some mechanisms out there, and part 

of the effort that we want to do is to bring some of these interesting ideas and practices to a place where others can understand 

what the practice is and how effective it’s been. So that’s one of the 

things that we’re looking at. 

Senator CORKER. Well, thank each of you for your testimony. It’s 

been really interesting, and I hope something good comes out of 

this. Mr. Abagnale, I’m glad you’re on our team now. 

[Laughter.] 

Thank you very much. Thank you, Mr. Chairman, for a great 

hearing. 

The CHAIRMAN. Thank you so much, Senator Corker. Mr. 

Smocer, what percentage of your banks are currently making an effort to train their tellers to determine whether or not something 

fraudulent is taking place? 

Mr. SMOCER. I don’t know if I have an exact number for you. But 

I will tell you, with the working group that we formed, virtually 

all of our banking members. So almost 50 out of the 50 we have 

are members of that group who are working to improve—either 

they have a program now or improve a program that they have 

now. So across the whole industry, I wouldn’t be able to answer 

that question for you. But I know this is a very important topic to 

them. 
22 

The CHAIRMAN. So you would suggest that there should be some 

training in the case of every teller? 

Mr. SMOCER. Yes, I frankly think so, and part of what we’re attempting to do, the group that we have is not only members of the 

Roundtable, but we’ve invited the other banking trade associations 

and credit union trade associations to have their members involved, and the group also includes a lot of folks from the agencies 

as well. For example, we’ve got CFPB involved and other agencies, 

because what we’re trying to do is really build a broad sector-wide 

program, so something that any bank or any credit union can use 

as the base for their training program. 

And it is two-fold. It is not only just—well, it’s almost three-fold. 

It’s internal in the sense of employees, so employees who are the 

tellers and the front-end personnel who customers typically come 

in to see. It’s also internal in the sense that we’re trying to do work 

with the fraud investigation and fraud detection folks to make sure 

that, particularly on the investigative side, that internally they can 

build better cases to be able to hand off to prosecutors. 

I think one of the things that we recognize as an industry is that 

while Frank is very correct, trying to get in many cases law enforcement or a prosecutor, whether it’s local or Federal, to take a 

case, they often have, because of their workloads, they often have 

thresholds, and below a certain amount it’s hard to convince them 

to take an interest in the case. 

But we also know that if internally the financial institution can 

help build the case for them and put a lot of the material together 

and hand it over, then that typically incents them to take some action while we’re there. 

And then the other component besides the internal side is, as I 

mentioned earlier, trying to help build this broader consumer education piece too, and use the banks to help build it, and use the 

banks to help distribute it and distribute the kind of material that 

others have talked about here. 

The CHAIRMAN. Mr. Greenwood, I see you pondering this question, the training of the bank tellers. 

Mr. GREENWOOD. It’s key Senator. That’s why when we saw the 

change in the law, making bank and credit union tellers mandated 

reporters, we saw a huge increase in the number of reports, because unfortunately a lot of banks and credit unions in other states 

are fearful of making that call to Adult Protective Services for fear 

that they will get retribution from their customer or their member. 

So even if a state doesn’t want to make it mandatory, at least they 

should make it permissive and give the banks and the financial institutions the protection that they need to encourage them to make 

these calls. 

It also creates a responsibility on the part of Adult Protective 

Services, on law enforcement and prosecutors to reach out to these 

financial institutions. So we try to do that. In fact, in California we 

try to recognize good stewardship by banks and credit unions so 

that if they have actually intervened and thwarted a crime or have 

enabled us to prosecute, we want to give that bank teller due recognition and make sure that it’s well known throughout the industry. 
23 

The CHAIRMAN. You mentioned that financial institutions in California are mandated reporters. 

Mr. GREENWOOD. Correct. 

The CHAIRMAN. So how has this changed banks’ behavior with 

regard to preventing and reporting financial scams against seniors? 

Mr. GREENWOOD. Well, initially what changed was the fact that 

because the law came into place, they gave those institutions a 15- 

month grace period to train their staff. So immediately we got 

awareness for the bank tellers and the credit union tellers, and 

that created in itself a lot of response by saying, wow, I didn’t 

know these scams went on. 

For example, the grandma scam is huge all across the country, 

and we all know that one where the crook calls up and pretends 

to be the grandson, he’s in jail and he needs $5,000 bail money to 

get out of jail, and it’s happening all the time. Well, the victim goes 

to the bank or the credit union to withdraw the money in cash so 

they can then go to Moneygram to wire it. 

It’s amazing, until this law came into place, how few bank tellers 

and credit union tellers knew of the existence of this scam. So now 

they do, and as a result the training and the awareness in the 

banks and the credit unions has really improved the response. 

I think it’s also helped encourage the bank tellers and the credit 

union tellers to know that if they do make the report, Adult Protective Services is going to cross-report to a trained detective in San 

Diego who will bring it to a dedicated prosecutor in my office, who 

will then hopefully bring about a prosecution. And actually the 

bank tellers are very keen to come to court and testify because they 

can see the end result of their initial phone call, and it’s very gratifying to an employee of a bank to know that what that call meant 

in the end was either to stop the damage or to actually catch the 

crook in their tracks and put them away, and that’s indeed very 

rewarding to the financial institution. 

Mr. SMOCER. And, Senator, if I would follow up, I think Paul 

made a good point. As we think about the training, there are really 

two key aspects. One is awareness around the types of scams that 

are going on, so the grandmother scam, I need to wire money out 

of the country because, as I mentioned earlier, I want to buy a 

bride scam, which is a common one as well. 

But it’s also somewhat behavioral. So the teller recognizing that 

the customer comes in with a companion, and that the companion 

appears to be exerting undue influence on the customer, actions 

like trying to pull the customer aside to question whether, in fact, 

it’s their decision that’s going on here or whether they’re being influenced by this individual. So it’s a little bit of both. It’s awareness 

of the kinds of scams that are going on, but it’s also trying to understand the behaviors that are inhibited when some of these situations go on. 

But the one thing I would also add to it, and we brought this up 

at the Elder Justice Coordinating Council meeting, and Frank kind 

of mentioned it earlier in a way, as we implement some of these 

new technologies, some of those technologies have an effect that we 

didn’t often think about. So one of the things we talked about at 

EJCC was the Social Security Administration moving to an all di-
24 

rect deposit model, so elders not getting checks anymore, physical 

checks. 

Those physical checks that they got in the past were often a trigger for them to go to the branch, to see the teller, to see the folks 

that have known them for years that they always banked with. 

Now they may still want to do that just because they want to get 

out, but there’s less of an incentive for them to actually go into a 

branch anymore, for someone to physically see them on an ongoing 

basis and be able to recognize that something is askance here or 

there’s a change of behavior that is causing a red flag to occur. 

That’s not to suggest in any way that the training isn’t critical, 

but things are changing as we move into a more electronic world. 

That face-to-face just doesn’t exist quite as much anymore. 

The CHAIRMAN. How often do banks alert the police, and under 

what conditions? 

Mr. SMOCER. I would say any time there’s a suspicion that something is potentially fraudulent, certainly when it’s recognized to be 

fraudulent. There are situations, obviously, as we talked about earlier, where there are privacy concerns that need to be clarified, and 

I think once we can clarify those privacy concerns, particularly if 

we can have a ‘‘hold harmless’’ kind of model put in place, which 

is I think what Paul alluded to with the California law, that just 

report it, even if it turns out that it’s not fraud, which is a key concern, because what if I report this and it turns out it’s not fraud? 

Am I going to get in trouble? Am I going to get my institution in 

trouble? 

Those kinds of ‘‘hold harmless’’ agreements would go very far, I 

think, to enhancing it, because honestly I couldn’t probably give 

you an exact number, but I will tell you I have talked to and heard 

many, many scenarios where the bank tellers in particular—I 

mean, they’re looking out for their customers. They know these 

folks. They’ve known them, in many cases, for years and years and 

years, and they want to do the right thing. 

The CHAIRMAN. So are you suggesting that if we had these ‘‘hold 

harmless’’ laws across the country, we’d be in much better shape? 

Mr. SMOCER. I think if we can clarify the privacy issue, and I 

think CFPB is working on that to some extent. But certainly I 

think that would—my personal opinion would be that would go a 

long, long way to enhancing the reporting. 

The CHAIRMAN. A long, long way. 

Mr. SMOCER. Yes. 

The CHAIRMAN. Paul, do you think so? 

Mr. GREENWOOD. Well, I do, Senator, because until we had this 

law in place, as I said, I would have discussions with banks and 

credit unions all the time when I would see a crime report coming 

in where a bank teller did not make a report. I would call up the 

bank and say why didn’t you? And the immediate response was 

we’re just afraid to do that, we don’t want to get sued. So I think 

if we provide the protection for the financial institutions, and the 

encouragement, then it will allow institutions to encourage their 

bank tellers to make that call. 

As my colleague has said, occasionally, 1 out of 100, it might be 

a wrong call. But no one is going to blame the teller for making 

that call. It’s the silence which is the enemy. 
25 

The CHAIRMAN. Okay. 

I’ll ask you, Ms. Brown, what are the best practices you’ve found 

across the four states that you studied that work well for preventing and responding to elder financial abuse? 

Ms. BROWN. Well, we’ve been hearing about many of them right 

here. I think one of the things that has really struck me is in this 

panel the types of best practices that we saw, like good training for 

bank employees, like being careful about background checks. Many 

of those kinds of things are things we saw in the states. But also 

I think what has really struck me today is that there are so many 

good ideas and so many interesting public awareness efforts with 

brochures that have really attractive and interesting titles. 

But what we see is that there are different areas of the country 

or jurisdictions that have a stronger commitment to this or a 

stronger interest, and that’s one of the reasons why we recommended that the Elder Justice Coordinating Council develop a 

national strategy, because I think the kinds of best practices like 

developing brochures that really reach people, or doing training 

programs that reach relatives or bank employees are something 

that could be beneficial and would be helpful to be spread out 

throughout the country and not just in the spots where there’s a 

much stronger commitment or interest in this. 

The CHAIRMAN. All right. 

Any other comments from members of the panel? 

Mr. Humphrey. 

Mr. HUMPHREY. Mr. Chairman, I would just like to add that part 

of the effort here, I think—and it’s reflective of what has happened 

in California and elsewhere. We’re in the process of developing upwards of four model prevention networks that are slightly different 

in each location. We want to try and develop these coordinated 

local networks between public, private, law enforcement, non-profit 

organizations, and state, local and Federal agencies to work locally 

on these efforts. Part of these efforts will be in the area of education and training and just getting people to know one another. 

What was so successful in California, one of our models, was just 

bringing this all together. But then again, it was also framed with 

a state law of reporting that encouraged that effort to take place. 

There’s a lot of room for these programs to take place. There are 

different ways of doing it. That’s the wonder of working in the 

states. You find different approaches. But the coordination and collaboration both at the Federal, state and local level is key, and 

that’s why I think the Coordinating Council will have a very important role to play. 

The CHAIRMAN. Good. 

We thank you all for coming to speak to us here today. 

This is the last hearing of the Aging Committee for the 112th 

Congress. We’ve been able to accomplish a lot, and we worked hard 

to save taxpayer dollars while protecting our seniors. 

There are many people that made our success possible. First I’d 

like to thank my Ranking Member, Senator Corker. He’s been a delight to work with, and I appreciate his open manner and bipartisan nature, which I think has been obvious here today, as well 

as throughout the year. His staff, especially his staff director, Mike 
26 

Bassett, have worked well with our side and for the people of his 

state, Tennessee. 

No senator accomplishes anything in this institution without 

staff, and I’ve had a great one over the years. They have always 

focused on doing the right thing for seniors and protecting our most 

vulnerable people in this country. Joy McGlaun, Sarah Levin and 

Anne Montgomery have been my preeminent experts on health 

care. Cara Goldstein and Joel Eskovitz have done a great job protecting seniors and their retirement savings. Jack Mitchell, my 

fearsome, fearless investigator, has done a great job uncovering 

malfeasance in the public and private sector. Ken Willis has been 

great ensuring that the work we do gets noticed. Patricia 

Hameister has made sure that all of these hearings go off without 

a hitch, and for that I’m grateful. I’m also grateful to Zac Tretow 

and Carissa Lewis, who make the people of Wisconsin feel welcome. And as for my staff director, Chad Metzler, who has been 

with me in various capacities for the past 16 years, he is indeed 

irrepressible and irreplaceable. 

So I thank all of them, and we thank you all for being here 

today, and we wish you well. 

[Whereupon, at 3:25 p.m., the hearing was adjourned.] 
(27) 

APPENDIX 
28 

Testimony by Frank lV. i\bagnale 

fJ. S. Senate 

Speeial £ommiiiee Oil l\ging 

November 15,2012 

Frank W. Abagnale and Assoeiaies 

60 I Pennsylvania Avenne. l\W 

Snite 900; Soutb Bnilding 

Wasbington, O£ 20004 

.800.237744:) 

www.abagnale.eom 

1 
29 

INTODUCTION 

Chairman Kohl, Ranking Member Corker, Members of the Committee, I 

am honored to be invited to testify before you today on the seriousness 

of identity theft and financial fraud against the elderly and the need for 

education. I am Frank Abagnale subject of the book, movie and 

Broadway musical "Catch Me If You Can". 

I have a unique perspective having committed fraud as a teenager some 

40 years ago and having spent the last 36 years of my life teaching at the 

FBI Academy and field offices of the Federal Bureau of Investigation. In 

my 36 year career, I have conducted over 3,000 lectures and written four 

books on these subjects. For the past 36 years, I have worked to try to 

prevent fraud, forgery, embezzlement, identity theft and other white 

collar crimes. 

One serious issue we face is financial fraud against the elderly. This can 

be perpetrated by family members, financial advisers, home healthcare 

providers, friends, scam artists, and others. As I'm sure you are all 

aware, in 2010 the Consumer Financial Protection Board estimated $2.9 

billion dollars was stolen from financially exploited elders and the 

2 
30 

instances of financial theft from seniors grew 12% from 2008 - 2010. This 

is probably a low estimate because many times the elderly are too 

embarrassed to admit that they have been defrauded and therefore it 

goes unreported. Their families may not even be told. Last year, white 

collar crime in America had reached the $900 billion dollar mark. 

Medicare fraud alone was estimated conservatively at $179 billion 

dollars. The IRS paid over $5 billion dollars in fraudulent tax refunds 

filed by individuals using a stolen social security number. 

I make my home in Charleston, sc. Last month 3.5 million social 

security numbers and over 300,000 credit and debit card numbers were 

stolen from the SC Department of Tax Revenue by criminals who hacked 

into the state's computer system. It is believed that they not only stole 

social security numbers and credit card information, but also the entire 

return of each person who filed a SC tax return. This means the 

criminals have the social security number of the dependents; the home 

address; bank account numbers and copies of the W-2s. 

What is truly amazing to an individual like me is that what I did 40 years 

ago as a teenager is 4,000 times easier to do today due to technology. 

Unfortunately technology breeds crime -- always has and always will. 

3 
31 

There will always be individuals who will use technology in a negative 

and self-serving way. 

I have always believed that the government should take the lead in 

education to combat this horrendous crime. However, sometimes it 

seems the government makes it easier for individuals to commit these 

crimes. For example. The Centers for Medicare and Medicaid Services 

uses Social Security Numbers as part of the Medicare number. This 

means that anyone who sees the Medicare number can determine the 

Social Security Number. In a hospital or medical setting, a worker could 

have complete access to a senior's Social Security Number, home 

address, date of birth, possibly credit card numbers, bank account, and 

other information. This threat of identity theft of seniors will not be 

alleviated until the Social Security Number is removed from the 

Medicare card. 

The elderly are hungry for information but do not know about legitimate 

resources where they can turn for help. Numerous companies on 

television and radio, as well as talk show hosts, promote and market 

solutions which mayor may not actually work. This is a great example 

4 
32 

of the victim going for help, but being victimized again by those 

companies that are claiming to help them. 

Throughout my career, I have always believed that education is the best 

prevention. If you educate and explain to people their risks, in most 

cases they are smart enough to take that information and reduce their 

risks. I believe education is the only approach to help eliminate elder 

fraud. Education is not only important for our seniors, but it also helps 

bring awareness to all citizens so they can recognize the signs of fraud 

and know how to protect themselves. I believe that one of the most 

powerful tools at the government's disposal is creative Public Service 

Announcements that point out the most common scams and explain how 

to avoid becoming a victim. I recommend the government sponsor 

Public Service Announcements, mailing stuffers and educational 

materials so that individuals can learn to protect themselves and their 

loved ones. 

Protecting one's identity is an individual's responsibility. If a person 

ages to the point that they cannot take care of their personal issues then 

the family and friends should help take responsibility. Everyone has to 

be educated. Government regulation is not the answer. 

s 
33 

I recommend the following to seniors to protect their identity: 

• Review your credit report semi-annually 

• Reconcile your bank accounts in a timely manner 

• Be suspicious of calls, e-mails or letters asking for personal 

information 

• Don't give out your SSN - Just because a form contains a space for 

your SSN doesn't mean you have to provide it. 

• Invest in a micro-cut shredder. 

Finally, I believe that punishment for fraud and identity theft and 

recovery of stolen funds are so rare, prevention is the only viable course 

of action. 

Frank W. Abagnlile 

ABAGNALE 

&Ass·oclATEs 

Washington, DC 

(800) 231 7443 

(202) 220 3135 

Irank@abagnale.com 

6 
34 

GAO 

For Release on Delivery 

Expected at 2:00 p.m. EST 

Thursday, November 15, 2012 

GAO·13·140T 

United States Government Accountability Office 

Testimony 

Before the Senate Special Committee 

on Aging 

ELDER JUSTICE 

Strengthening Efforts to 

Combat Elder Financial 

Exploitation 

Statement of Kay E. Brown, Director 

Education, Workforce, and Income Security 

GAO 

Accountability * Integrity * ReliabfUty 
35 

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. ' 

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 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 

1 MetLife Mature Market Institute et al. (2011). The MefUfe 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. 

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

Exploitation, GAO-13-110 (Washington, 0 C .. November 15, 2012). 

Page 1 
36 

agencies; 3 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. 

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 

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

safeguards to prevent exploitation by financial services providers, power 

of attorney' 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, Posta! Inspection Service, and Securities and Exchange Commission. 

4 An oider 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 2 GAO·13·140T 
37 

According to experts, collaboration between the social services systemwhich protects and supports victims-and the criminal justice systemwhich 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. s 

I n 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 

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. 

We found that law enforcement authorities in some locations have 

devoted resources to promoting public awareness of elder financial 

5 Brandl et ai, 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 carefu! records; (2) allows a third party to refuse to honor a power of attorney 

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

requires the third party to report to APS; (3) allows cowagents to be appointed for 

additional thirdwparty oversight; and (4) imposes liability on agents who violate the taw. 

Page 3 GAO-13-140T 
38 

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 4 GAO-13-140T 
39 

Contacts and 

Acknowledgments 

(131214) 

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. 

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42 

Testimony of Hubert H. "Skip" Humphrey III 

Assistant Director, Office for Older Americans 

Consumer Financial Protection Bureau 

Before the Senate Special Committee on Aging 

November 15, 2012 

Thank you Chairman Kohl, Ranking Member Corker, and distinguished members of the 

Committee for the opportunity to speak with you today about the Office for Older Americans at 

the Consumer Financial Protection Bureau (Bureau or CFPB) and its work to address the 

devastating problem of elder financial exploitation. Chairman Kohl, on the eve of your 

retirement from the Senate, we want to thank you for your longstanding dedication and the 

important role you've played as Chairman ofthis Committee in enhancing the well-being of our 

older citizens. 

My name is Hubert Humphrey and I joined the Bureau in October, 20 II, to serve as Assistant 

Director in the Office for Older Americans. In fact, exactly one year ago today, I had my first 

opportunity to testifY before a Senate committee about the Bureau's important role in helping 

older Americans. Before arriving at the Bureau, as Attorney General in Minnesota-and then as 

a national board member of AARP-I became keenly aware of the many financial challenges 

that older consumers face. 

CFPB Office for Older Americans 

During the past year, I've been privileged to lead an Office with a critically important mission: 

the CFPB's Office for Older Americans is the only federal office specifically dedicated to the 

financial health of Americans aged 62 and older. 

Our Office works closely with all Divisions of the Bureau to carry out its broad mission: to 

ensure that markets for consumer financial products and services are fair, transparent, and 

competitive, and that all consumers have access to those markets. The Bureau will fulfill this 

statutory charge by making rules more effective, by consistently and fairly enforcing those rules, 

and by empowering consumers to take more control over their economic lives. 

Our Office's statutory mandate is to help provide consumers aged 62 and over with the tools they 

need to protect themselves from financial abuse and to make sound financial decisions. To 

carry out Congress' directives, in our first year we have made preventing, detecting and 

redressing elder financial exploitation Job Number One. 

To do so, we recognize that collaboration is critical-- on the local, state, and national levels, and 

between both public and private sectors. We agree with GAO that a collaborative and 

coordinated effort by federal agencies can help optimize strategies to combat the devastation of 

elder financial exploitation. Congress already recognized the importance of collaboration when 

Page 1 of 4 
43 

it mandated that the Office for Older Americans do two key things: 

• Coordinate consumer protection efforts of seniors with other Federal agencies and State 

regulators, as appropriate, to promote consistent, effective and efficient enforcement; and 

• Work with community organizations, non-profit organizations, and other entities that are 

involved with educating or assisting seniors. 

To jumpstart and foster these collaborative efforts, I have spent the past year traveling 

throughout the country to meet with state and Tribal officials, such as Attorneys General, 

financial regulators, Adult Protective Services administrators, commissioners on aging, chief 

justices, and court administrators, to listen to their experiences and insights, to brainstorm with 

them about how best to prevent elder financial abuse, to develop joint efforts, and to assure them 

of my commitment to work with them to protect older Americans from devastating financial 

losses. I, or a member of my small team, have visited 24 states in just over a year. 

Similarly, my staff and I have engaged with non-profits, community organizations and industry 

groups to figure out how our new federal agency can best help and partner with them, and to 

begin to share resources to support their work. For example, we participate in a working group 

with the Financial Services Roundtable that addresses issues such as enhancing the capacity of 

financial institutions to report suspected elder financial abuse. We worked closely with the 

National Endowment for Financial Education on convening a forum of national experts on 

diminished capacity to make financial decisions. 

Elder Justice Coordinating Council 

Our Office has been engaged from the outset in coordinating and building cooperative plans with 

our Federal partners. We applaud the Secretary of Health and Human Services for convening the 

Elder Justice Coordinating Council in partnership with the Attorney General. As a member of 

this eleven-agency body, the Bureau is fully engaged in the Council's work and hopes the 

Council will shine a light on the disastrous impact of financial exploitation and catalyze the 

development of a prevention strategy. We recognize the key role in the Council played by HHS 

Assistant Secretary for Aging Kathy Greenlee, who has been an important partner since I arrived 

at the Bureau. 

At the Elder Justice Coordinating Council's inaugural meeting in October of this year, we heard 

some important themes from national experts from law enforcement, social services, academia, 

medicine, law, the judiciary, financial institutions and other stakeholders. These themes include 

the following: 

• Older Americans are victimized by a broad range of perpetrators, including scam artists, 

family members, caregivers, financial advisers, home repair contractors, and fiduciaries 

such as agents under power of attorney and court-appointed guardians. Development of 

strategies to deal with the myriad of "bad actors" is essential. 

• There is a need for collaboration at the federal, state and local level, as well as publicprivate partnerships. 

Page 2 of 4 
44 

• Diminished capacity to make financial and personal decisions is, as a leading geriatrician 

and researcher stated, the "800-pound gorilla" in the room. l Even mild cognitive 

impairment disastrously reduces an older adult's ability to detect a fraud or scam. 

Unfortunately, diminished capacity also undennines the effectiveness of educating older 

consumers on how to protect themselves. 

• It is vital to collect more and better quality data on elder abuse, and to conduct research 

and evaluate promising tools for prevention, detection and redress. 

• We need a broad-scale public education campaign to raise awareness of elder financial 

abuse and what to do about it. Advocates often make the point that efforts to address 

elder abuse are thirty years behind the child abuse field-yet we're approaching 

50 million seniors aged 62 and over, comprising roughly 20 percent of our population, 

and all are potential victims. 

Office for Older Americans' Initiatives 

The CFPB's Office for Older Americans has a number of initiatives underway aimed at 

combatting elder financial exploitation. Many already address issues flagged for us and our 

federal partners at the Elder Justice Coordinating Council. Here are a few: 

• We are developing a set of guides for "lay fiduciaries." We recognize that family 

members and other fiduciaries often have no experience handling someone else's money, 

and they need help so they can do the right thing. These user-friendly "how-to" guides 

will be for agents under powers of attorney, guardians, trustees, Social Security 

representative payees, and VA fiduciaries. The Bureau will produce a generic national 

guide in addition to some state-specific guides and a replication manual for other states. 

They will explain what a fiduciary does, as well as record-keeping, prudent investment 

requirements, limitations on comingling funds, and other critical basics to manage a 

vulnerable adult's money. In addition to this essential guidance on how to handle another 

person's finances, the guides will teach people to spot financial exploitation and protect 

assets from unfair, deceptive, and abusive practices by third parties. We anticipate 

publishing these guides in 2013. 

• Another project focuses on financial exploitation of elders in congregate settings. 

Often when older adults residing in these settings are the victims of financial abuse of all 

types, the first sign may be that their bills for their residences aren't getting paid and they 

are threatened with eviction. These settings include senior housing, assisted living, and 

skilled nursing facilities. We are producing a national guide to provide operators of 

congregate facilities with skills to identify and intervene in exploitation cases further 

upstream and to have protocols for doing so. We already have offers from many national 

organizations and government entities to help distribute these much-anticipated guides, 

and similar enthusiastic responses regarding the lay fiduciary guides. 

• The Office is developing a new program called Money Smart for Older Adnlts, in 

collaboration with the FDIC. This community education and awareness program will 

focus on preventing, recognizing and reporting elder financial exploitation and will serve 

Oral statement of Dr. Mark Lachs, Weill Medical College of Com ell University and Director, New York City 

Elder Abuse Center, October 11,2012. 

Page 3 01'4 
45 

as training for older consumers, family caregivers and other key audiences. Partnering 

with another federal entity will extend the reach of this endeavor. 

• On the state and local level, we are working with key stakeholders in several states to 

help create and sustain "Older American Protection Networks." These coalitions aim 

to develop multi-disciplinary teams to provide community education, raise public 

awareness, enhance response to reports of abuse, and increase prosecution. 

• The Bureau has heard concerns and questions from financial institutions as to whether 

sharing personal account holder information when reporting elder financial exploitation is 

permissible under federal law. The Office for Older Americans, in collaboration with 

other Bureau offices, is developing strategies for communicating clearly to a spectrum of 

financial institutions that the Gramm-Leach-Bliley Act generally does not prohibit them 

from reporting suspected abuse to--{)r respond to requests for personal information 

from-law enforcement, APS agencies, and other relevant entities. In addition, the 

Bureau is exploring options for collaborating with other federal agencies in providing this 

guidance to financial institutions. Through its efforts, the Bureau hopes to convey that 

these actions are permissible and important. 

Other Federal Efforts 

Through our outreach efforts and our initial work in the Elder Justice Coordinating Council, 

we've learned that our federal partners have many initiatives that complement ours and that, 

taken together, can make a real difference in public education and prevention of financial 

exploitation. These partners include the Administration on Aging at HHS, the Social Security 

Administration, the U.S. Postal Inspection Service, the Department of Housing and Urban 

Development, the Department of the Treasury, the Department of Justice, the Federal Trade 

Commission, the Department of Veterans Affairs, the Department of Labor, the Corporation for 

National and Community Service, and the Securities and Exchange Commission. 

Conclusion 

Congressional leadership and support is critical to implementing a multi-faceted solution to the 

serious problem of elder financial exploitation. We commend the Chairman, the ranking 

member and other members of this Committee for holding this hearing to put the issue in the 

spotlight. We know that this is just one in a series of hearings you have convened to examine 

various aspects of the problem. We look forward to continued information sharing with 

members of Congress and the GAO on this important topic. 

Again, thank you for the opportunity to present this testimony. 

Page 4 of 4 
46 

STATEMENT 

OF 

BITS PRESIDENT PAUL SMOCER 

ON BEHALF OF THE FINANCIAL SERVICES ROUNDTABLE 

BEFORE THE 

SPECIAL COMMITTEE ON AGING 

OF THE U.S. SENATE 

AMERICA'S INVISIBLE EPIDEMIC: 

PREVENTING FINANCIAL ELDER ABUSE 

NOVEMBER 15, 2012 
47 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

The Financial Services Roundtable1 (the "Roundtable") and BITS appreciate the opportunity to 

share our thoughts with the members of the Senate Specia I Committee on Aging regarding the 

financial exploitation of older Americans and actions we can collectively take to reduce that 

explOitation. 

The financial services industry is a key part of the circle protecting older Americans from 

financial fraud and explOitation. When employees observe signs of potential exploitation, they 

can work with families, caregivers, social service agencies and law enforcement to prevent, 

detect, and help investigate and prosecute the individuals who engage in fraud. 

The Roundtable and its members are committed to encouraging their employees comply with 

high standards of conduct when providing financial advice to all customers, including older 

Americans and their families. Helping ensure a secure retirement for millions of Americans is 

central to the business and the mission of the financial services industry. 

THE PROBLEM 

By 2030, the number of Americans aged 65 and older is projected to double to 71 million, 

roughly 20 percent of the US. population. 2 In some states, fully a quarter of the population is 

likely to be aged 6S and 0lder.3 Unfortunately, this increase in the aging population creates a 

potentially large pool of potential victims for financial explOitation. 

It is sad, but true, that the most frequent perpetrators of financial abuse are family members, 

who by some estimates commit nearly 75% of crimes,4 and professional criminals. It is also 

important to note that financial institutions are often the first line of defense against this 

financial explOitation. 

Since many older customers prefer to conduct transactions in person, financial services 

employees can be the first to detect changes in an older customer's behavior. Signs of 

exploitation of an elderly customer may include unusual transactions or changes to accounts, 

unpaid bills, changes in spending patterns, new individuals accompanying the customer to a 

bank facility, and missing property. When these and other signs are detected, and an 

investigation suggests that exploitation is taking place, financial institutions can help the 

1 The Financial Services Roundtable represents 100 of the largest integrated financial services companies providing 

banking, insurance, and investment products and services to the American consumer. Member companies 

participate through the Chief Executive Officer and other senior executives nominated by the CEO. Roundtable 

member companies provide fuel for America's economic engine, accounting directly for $85.5 trillion in managed 

assets, $965 billion in revenue, and 2.3 million jobs. 

2 The State of Aging and Health in America, Centers for Disease Control and Prevention (CDC) and The Merck 

Company Foundation, 2007, http://www.cdc.gov/Aging/pdf/saha_2007.pdf. 

, The State of Aging and Health in America, Centers for Disease Control and Prevention (CDC) and The Merck 

Company Foundation, 2007, http;//www.cdc.gov/Agingladf/saha 2007.pdf. 

4 http://www.consumerreports.org/cro/money/consumer-protection/preventing-financial-elderabuse/overview/index.htm 

Page 1 
48 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

customer take action to protect his or her assets. Financial institutions also work with agencies 

such as Adult Protective Services (APS), local law enforcement and prosecutors, many times as 

part of local or regional task forces focused on elder abuse prevention and prosecution. 

Institutions also report suspected abuse via the Suspicious Activity Reports (SARs) filed with the 

Financial Crimes Enforcement Network (FinCEN), an agency of the United States Department of 

the Treasury. 

Following the filing of SARs, institutions may be contacted by law enforcement who are 

investigating the case. Institutions actively work with law enforcement after filing all legally 

required documents. Institutions also participate in regional partnerships that involve law 

enforcement of all levels. During these meetings, institutions will share trends and suspects. 

This allows for institutions and law enforcement partners to share best practices. Through this 

active engagement and partnership, cases are able to be more quickly resolved. 

For decades, financial institutions have been at the forefront of fraud detection utilizing 

sophisticated technology, modeling, training and education. Because of these proactive 

measures, they are often the first to detect patterns associated with fraud. Using a variety of 

safeguards, financial institutions make every attempt to ensure the reliability and security of 

financial transactions as well as protect financial privacy. In fact, financial institutions often 

exceed the standards set by financial regulators in order to protect their customers, 

shareholders and employees better. 

Education - of employees, customers and other stakeholders - is critical for preventing 

financial abuse of all customers - including more vulnerable ones such as older Americans. 

Many financial institutions have extensive programs to educate employees and customers on 

detecting abuse and steps to secure accounts from the lure of fraudsters. Financial institutions 

also work closely with APS, law enforcement and prosecutors to educate those entities on 

patterns of fraudulent activity and help identify individual cases of potential fraud. Financial 

institutions also work closely with community organizations to host panel discussions and 

community events to educate seniors and their caregivers about the risk of elder financial 

abuse. These efforts provide older American and their advocates education and resources to 

not only recognize financial elder abuse, but to also take steps to proactively protect oneself 

and ones assets through, for example, proper document disposal and identity theft prevention, 

and reports of the crime when it occurs. 

Employees and customers who are better educated about fraudulent behavior and preventing 

fraud are more likely to take fraud prevention measures. An example of the Roundtable 

member's education efforts is a white paper produced by the Roundtable's BITS group entitled, 

"Protecting the Elderly and Vulnerable fram Financial Fraud and ExplOitation," which helps 

financial institutions and their customers identify and combat elder abuse.s 

5 BITS _ "Protecting the Elderly and Vulnerable from Financial Fraud and Exploitation" 

Page 2 
49 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

The Roundtable also partnered with the Administration for Community Living/Department of 

Health and Human Services and the Consumer Financial Protection Bureau to support the June 

14, 2012 White House Office of Public Engagement symposium in recognition of the 7th annual 

World Elder Abuse Awareness Day by providing financial industry speakers for the panel 

addressing the prevention of elder financial abuse. 

Recognizing the scope of this issue, the Roundtable's member believe it is important to 

continue to focus on it and to bring resources to bear. To that end, the Roundtable's members 

have formed a working group to focus on the issue of preventing financial abuse of the elderly. 

Further recognizing that solutions will require a multi-faceted approach, the Group's members 

consist not only of financial institutions, but additionally of a collaborative cross-section of 

federal agency representatives, representatives from various adult protective services 

organizations, and academics focused on the area of elder abuse. 

The Elder Working Group currently has identified two key projects on which it will concentrate. 

These are: 

• Develop a structure/syllabus for training financial institution consumer-facing staff and 

all new hires on elder fraud trends and internal procedures for reacting to suspected 

elder financial abuse, including engaging Adult Protective Services and law enforcement. 

This work will focus on building on work done previously, will incorporate new learnings 

and research and broaden the educational base for employees. Once completed, the 

work will be shared openly across the financial services sector. 

• Work with financial institutions with strong education programs to develop a publicly 

available awareness and education program to be made available to all financial 

institutions. 

CHALLENGES AND IMPEDIMENTS 

As we have engaged in our efforts regarding prevention of elder financial abuse and based on 

the experiences and feedback of financial institutions, we have identified a number of areas 

where potential impediments exist to improving prevention. For many of those, the assistance 

of the agencies forming the Elder Justice Coordinating Council (EJCe), either directly or in 

concert with other non-EJCC agencies, would be helpful to clarify concerns or remove 

impediments. On October 11, 2012, I had the opportunity to present these ideas to the 

agencies involved in the EJCC at its inaugural meeting. The impediments and possible solutions 

include: 

• Clarify the permissibility of age-based fraud monitoring. As noted previously, financial 

institutions utilize sophisticated fraud detection technology and modeling in their 

attempts to prevent and identify potential fraudulent activity in an attempt to protect 

customers. An added layer of sophistication could be to segregate their elder 

customers' activities for special screening. Many financial institutions are concerned, 

however, that segregating their customer population for this purpose could be 

Page 3 
50 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

interpreted to place them in violation of existing age discrimination laws and, therefore, 

put the institution at risk for potential fines or regulatory actions. 

It would be extremely beneficial if the involved EJCC agencies, particularly the 

Department of Justice, could clarify permissibility of age-based fraud monitoring. If such 

segregation is currently permissible, to assuage the concerns we have heard, a written 

opinion of the permissibility would be extremely helpful. If, in fact, it is considered a 

violation of current anti-discrimination laws to segregate this population for fraud 

monitoring purposes, we encourage the EJCC to undertake an effort to pursue 

legislative action to allow for an exception. 

• Authority to authorize a protective hold on a suspicious transaction. One significant 

challenge financial institution employees encounter is situations where an elderly 

customer wants to perform a transaction (e.g., a withdrawal, a request to transfer 

funds) in a situation where the employee strongly suspects or even knows that fraud is 

involved. This clearly creates a conundrum pitting the financial institution's contractual 

obligation to carry out its customers and instructions and the financial institutions' 

desire to prevent the elderly customer from being defrauded. 

There are a few methods that are suggested for dealing with this issue: 

o Working with CFPB and Treasury create an option allowing institutions to put a 

minimal hold on the transaction pending the sending of an alert of APS and APS 

discussing the situation with the customer. It will likely be necessary for CFPB 

and Treasury to work with the states to implement this suggestion. 

o Working coilaboratively with input from the u.s. Department of Justice, U.s. 

Postal Inspection Service, Federal Trade Commission and other agencies along 

with input from financial institutions, create and maintain a list of known 

fraudulent actors that can be used to "convince" elders of their involvement in a 

fraudulent situation. 

o Leverage the work already underway and led by the Consumer Financial 

Protection Bureau to create a list of local and regional APS services into a 

shareable database that financial institutions could use to understand who to 

contact that might be helpful in discussing these types of situations with 

involved elders. Along with creating a database for contacts, it will be necessary 

to further clarify the type of information institutions are legally able to share 

with APS regarding their older customer. 

• Another substantial challenge occurs when an individual with a duly executed Power of 

Attorney to act on behalf of an elder is suspected of trying to perpetrate fraudulent 

activity or activity not in the best interest of the elder. Duly executed Powers of 

Attorney give the holder the legal right to act on behalf of the customer. This essentially 

creates the same conundrum for the financial institution as noted in the previous point. 

Page 4 
51 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

There are a series of actions we would ask the EJCC members to consider regarding this 

issue. They include: 

o Powers of Attorney laws and regulations vary by state and, particularly in the 

case of Durable Powers of Attorney, can involve granting rights to the agent even 

after the principal becomes incapacitated. While the agent is obligated to 

exercise due care and protect the principal, state law is not uniform with respect 

to the specific responsibilities of an agent with regard to financial transactions, 

particularly when the principal is an elder. The development of uniform state 

laws and a Uniform Power of Attorney would be very helpful. Study of the 

feasibility and benefits of having a uniform Power of Attorney, particularly one 

for situations in which the principle is an elder should be undertaken. 

o Select agencies - most likely U.S. Department of Health and Human Services, 

Social Security Administration, CFPB, U.S. Department of Justice, the Federal 

Trade Commission and the U.S. Department of Veterans Affairs - should 

consider working collaboratively to develop educational materials that explain 

clearly to those agents with Powers of Attorney their financial responsibilities 

and provide specific examples of what are considered abusive behaviors. 

o The U.S. Department of Justice could undertake a study of existing criminal 

statutes that apply to financial abuse of elders. This should include both federal 

and state level statutes with the goal to develop a model criminal code 

applicable to this area that strongly disincents criminal actors and those acting as 

agents from taking advantage of the elderly. 

• Financial institutions are sometimes concerned with the liability they or their employees 

might incur in situations where they suspect and report elder abuse - particularly if it is 

a situation in which it is ultimately determined that a fraud was not involved. Today, 

certain states require the reporting of even suspicions of fraud, but that reporting is not 

uniform on a national level and statutory hold harmless provisions to protect the 

reporter seem far from consistent. 

The Council should work toward legislative action that would result in a national 

reporting statute that provides uniform electronic reporting requirements to a single 

report point which would disseminate the information (or otherwise make it available) 

to state and local agenCies, as well as uniform hold harmless protections for reporting 

parties. Additionally, the importance of federal and state agencies such as the CFPB, 

SEC, FINRA, and NSAA, etc., to coordinate their efforts in addressing elder financial 

abuse can ensure the avoidance of conflicting rules and regulations, which themselves 

would potentially harm individual clients. This should also include a definition of those 

individuals who are protected by the requirements, as in some states fraud of 

vulnerable adults follow the same requirements as fraud of the elderly. 

• Confusion of requirements regarding to whom to report the abuse and under what 

circumstances. 

Page 5 
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Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

FinCEN, a part of the U.s. Treasury, issued an advisory on February 22, 2011 that 

addresses the reporting of actual or suspected elder financial abuse on Suspicious 

Activity Reports (SARS).6 This provided financial institutions with guidance on reporting 

specific to SARs' requirements; however, the reporting of elder financial abuse often 

goes beyond that type of reporting. Reporting would likely include reporting of 

situations to Adult Protective Services or similar agencies as well potentially, depending 

on the circumstances, to local law enforcement. Today, however, the structure of adult 

protective services type agencies is diffused across the country. Some locations have 

more centralized statewide or regional agencies will others structure such agencies very 

locally. Determining the correct agency for reporting is often difficult. law enforcement 

capabilities to deal with such reports often vary as well. In addition, today with law 

enforcement often done at the local level, it is often difficult to synthesize information 

across jurisdictions to identify when elders in different locations may be being subjected 

to scams and fraudulent activity that relates to the same set of criminal actors. 

To assist with overcoming these issues, we suggest the following actions: 

o The CFPB is currently working with various constituencies to develop a database 

of regional and local Area Agency on Aging across the United States. Making 

that database accessible to financial institutions would facilitate those 

institutions ability to know and contact the correct agency. 

o Recognizing that local law enforcement lacked skills in investigating cybercrime, 

in 2007, the Department of Homeland Security, the United States Secret Service, 

the Alabama District Attorneys Association, the State of Alabama, and the city of 

Hoover, Alabama partnered to create the National Computer Forensics Institute 

(NCFI). This partnership provides state and local law enforcement officers the 

training necessary to conduct basis electronic crimes investigations. Creating a 

similar model to train state and local law enforcement personnel the training 

necessary to conduct investigations of elder abuse could have significant merits. 

Short of such a large effort, creating and providing to local law enforcement 

bodies an educational opportunity through such options as written best 

practices, webinars and seminars on the subject would be beneficial. 

Note that these same concepts can be generally applied as well to local 

prosecutorial authorities, who sometimes also lack the knowledge and 

experience requisite to the successful prosecution of those who prey financially 

on the elderly. Similar training programs and best practices can also serve this 

community well. 

o The CFPB is currently working to establish state and regional coalitions of APS, 

law enforcement, prosecutors and financial institutions that can work together 

on the issue of elder abuse. We encourage continued expansion of this effort 

6 See http://www.fincen.gov/statutes_regs!guidance/html/fin-2011-a003.html. 

Page 6 
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Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

and offer our services to assist in connecting our Roundtable members into 

these coalitions. 

o While SARS reporting is working well today, a significant improvement can be 

made by specifically adding "Elder Financial Abuse" as a category in Section 35 of 

the SARs Reporting Form. This would allow for easier collation of such activity 

and facilitate cross matching of potential criminal actors within this area. 

• Enhanced financial literacy to empower further consumers, including older Americans, 

to make sound financial decisions. 

Financial literacy is one of the highest priorities for the Roundtable and its members at 

the grass roots and at the national policy level. In 2011, Roundtable member companies 

conducted more than 45,600 financial literacy projects around the country to empower 

further thousands of consumers to make sound financial decisions. 

As we noted earlier, as a part of the efforts of its Elder Working Group, the Roundtable 

has committed to work on two projects (i.e., develop a structure/syllabus for training 

financial institution consumer-facing staff and to develop a publicly available awareness 

and education program to be made available to all financial institutions). 

We would certainly welcome the engagement of any of the departments or agencies 

represented on the EJCC in this effort - either in development or ultimately in 

distribution of the publicly facing awareness and education materials developed. We 

believe a national-level awareness campaign targeting elder Americans and their family 

members would provide long-lasting benefits in helping to reduce elder financial abuse. 

• One last area of potential improvement involves the licensing of financial professionals 

who serve the elder community. In its August 20, 2012 letter to the CFPB regarding 

CFPB's "Request for Information Regarding Senior Financial Exploitation [Docket CFPB2012-0018]," the Roundtable mentioned another key area to reduce financial abuse of 

elders. It noted that an effort to make elders more aware of the licensing of financial 

professionals coupled with an effort by federal and state agencies and professional 

organizations' role in developing best practices for the training and licensing of financial 

professionals would have benefits. The Roundtable's comments on this last area are 

excerpted into Appendix A of this document. 

CONCLUSION 

We appreciate the opportunity to share our sector's focus on the issue of financial abuse of the 

elderly. We are committed to continuing to work on these issues to protect older Americans. 

As noted, we recently shared these thoughts with the Elder Justice Coordinating Council. The 

challenge of reducing elder abuse can only be resolved by continued focus on the issue by all 

relevant parties, including financial institutions, families of elders, government agencies and 

Page 7 
54 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

legislators. Only through this continued commitment will we be able to protect our seniors 

from financial abuse. We recognize that the ideas we have outlined in this testimony are, in 

many cases, concepts and suggestions. They are a starting point for this discussion. We 

recognize there are various methods to approach these issues and look forward to continuing 

to work with you and other key constituencies on these issues. 

Page 8 
55 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

Appendix A 

Excerpt from August 20, 2012 letter to the CFPB regarding CFPS's "Request for Information 

Regarding Senior Financial Exploitation [Docket CFPS-20ll-0018) 

• Consumers Should Seek Financial Advice Only From Licensed Financial Professionals, 

and the CFPB Should Work with Federal and State Agencies and Professional 

Organizations to Develop Best Practices For the Training of These Professionals 

The financial services industry has played a vital role in expanding retirement security for 

millions of Americans for the last 100 years. The industry currently manages more than $17 

trillion in retirement assets, which represents 36% of all U.S. household assets. 7 The U.S. 

retirement market is projected to grow to nearly $22 trillion by 2016,8 a 30% increase in 

retirement savings over four years. 

It is important that consumers of all ages seek professional assistance to prepare for and make 

major financial decisions involving investments, wealth planning, and retirement. When 

making these decisions, consumers should seek out individuals who are licensed under federal 

and/or state law. 

The Roundtable believes that consumers should only hire properly licensed investment 

professionals. Federal law regulating securities brokers, securities dealers, and investment 

advisers provides strong and effective protection for all consumers, including older Americans. 

The Securities and Exchange Commission, together with securities self-regulatory organizations 

like the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities 

Rulemaking Board, implement the registration and regulatory regime under federal securities 

law. These protections are complemented at the state level by laws designed to protect 

consumers from investment fraud. A similar registration and regulatory structure exists for 

futures professionals and firms, which are subject to oversight by the Commodity Futures 

Trading Commission, National Futures Association and other futures self-regulatory 

organizations. Additionally, state insurance commissioners regulate insurance agents in their 

respective jurisdictions.9 

7 http://www.ebri.org/research!?fa=genretire 

8 http://www.bankinvestmentconsultant.com!news!cerulli-predicts-retirment-market-will-exceed-22-trillion-by2016-2677132-Lhtml 

9 The most common license for securities professionals is the Series 7 - General Securities Representative, and the 

most common license for commodity futures professionals is the Series 3 - National Commodity Futures. 

Depending on the nature of their activities, investment professionals may need the following licenses: (1) Series 6 

-Investment Company ProductslVariable Contracts Limited Representative; (2) Series 22 - Direct Participation 

Programs Limited Representative; (3) Series 31- Futures Managed Funds; (4) Series 32 - Limited Futures; (5) 

Series 34 - Retail Off-Exchange Forex; (6) Series 42 - Registered Options Representative; (7) Series 52 - Municipal 

Securities Representative; (8) Series 62 - Corporate Securities Limited Representative; (9) Series 63 - Uniform 

Securities Agent State Law (NASAA); (10) Series 65 - Uniform Investment Adviser Law (NASAA); (11) Series 66-

Uniform Combined State Law (NASAA); and (12) Series 82 - Limited Representative, Private Securities Offerings, 

Page9 
56 

Comments of Paul N. Smocer, The Financial Services Roundtable/BITS 

We understand that a number of states and professional organizations have laws and programs 

that govern certifications and titles used by retirement professionals. While training that 

focuses on the specialized needs of older Americans may be valuable and useful, we urge the 

CFPB to partner with the financial services industry, federal regulators, financial industry selfregulatory organizations, state agencies and professional organizations in developing best 

practices for the training and certification of professionals who specialize in advising older 

Americans. 

Page 10 
57 

Statement of Paul R. Greenwood, Deputy District Attorney, Head 

of Elder Abuse Prosecution Unit, San Diego DA's Office 

Good afternoon, Mr. Chairman and distinguished members of the Special Committee on 

Aging. My name is Paul Greenwood and I have the privilege of heading up the San 

Diego District Attorney's Office Elder Abuse Prosecution Unit, a position which I have 

held for the past sixteen years. I am also a co-chair of the California District Attorneys 

Association Elder Abuse Committee. 

California defines an elder as anyone over the age of 65. 

I am therefore responsible for prosecuting felony crimes that are committed against 

victims in that age bracket. These crimes cover physical and mental elder abuse, neglect, 

and financial exploitation. 

At least 65% of my prosecutions involve some form of financial exploitation. The 

conduct of the criminals is becoming more brazen and diverse. The perpetrators are 

constantly developing new ways to gain access to our seniors' life savings and have 

focused upon a generation that typically has been more trusting and less able or willing to 

self report the victimization. 

Let me share some cases to illustrate the problem. 

Victoria Gilbert was a convicted felon who moved to San Diego from Nevada. She took a 

job as a caregiver and started work for an elderly widower who was physically and 

mentally. Within a few days she had convinced the victim to allow her to move in with 

her boyfriend, Gary Kircus, whom she portrayed as a deputy US Marshall. Soon both 

Gilbert and Kircus were stealing the victim's medications, and then depleting his 

checking account and assuming control of his credit card accounts. Fortunately, an alert 

bank teller became so concerned at the apparent isolation of her customer and the change 

in banking activity that she contacted the victim's adult children. After making an 

unannounced visit, the adult daughter discovered her elderly father close to death. Law 

enforcement was called in and both Gilbert and Kircus were arrested, prosecuted and 

ultimately convicted after a jury trial. 

William Pitre was an unlicensed contractor but described himself in flyers left in church 

parking lots as a licensed Christian contractor. A 79 year old widow contacted him in 

response to the flyer left on her car windshield; she wanted her fence repaired and her 

driveway resealed. The work was shoddy and incomplete; yet Pitre demanded excessive 

payment. The victim was so fearful that she was unable to write out the checks that Pitre 

demanded. He wrote out the checks and had the victim sign them. He then left his 

workmen in the kitchen standing over the victim while Pitre went to the bank to demand 

cash. The bank became suspicious and called the victim; however she told the bank to 

give Pitre the cash because she was afraid of what the workmen might do. The victim 

was too embarrassed to call the authorities; but the bank made a call to Adult Protective 
58 

Services who in tum contacted law enforcement after visiting the victim. As a result Pitre 

was arrested and prosecuted and received a state prison commitment. 

Donald Wade was a cab driver hired to drive Peggy twice a month to visit with her 93 

year old friend Ruth who was in the advanced stages of Alzheimer's and who resided in a 

skilled nursing facility. On one occasion Peggy cancelled the scheduled visit because of 

illness; however, Wade seized the opportunity to drive over to the facility and collect 

Ruth. He drove her to Ruth's bank and along the way obtained Ruth's signature to a CD 

surrender form that authorized the bank to cash in her CD for $97,000, albeit with a 

penalty for early withdrawal. Wade convinced the bank to issue a cashier's check payable 

to Wade's friend whom he described as Ruth's "attorney." At no time did the teller take 

Ruth to one side and ask her if she understood what was happening. As a result, Wade 

and his friend were able to steal $96,000 [the bank deducted $1,000 by way of a penalty] 

from Ruth's account. The crime was only discovered after Wade shot his friend over a 

dispute as to how the theft proceeds were being divided. Wade was convicted and 

sentenced to state prison. 

These cases underscore the importance of combating financial elder abuse through a 

multi-disciplinary approach. Throughout California we have seen examples of effective 

collaboration such as: 

L The emergence of Financial Abuse Specialist Teams [FAST] consisting of 

representatives from law enforcement, Adult Protective Services, financial 

institutions, elder law attorneys, prosecutors, and other qualified professionals. 

2. The creation of forensic elder centers that offer wrap around services for elder 

victims; Orange County has led the way thanks to the pioneering efforts of Dr. 

Laura Mosqueda from the UCI Medical Center. 

3. The expansion of mandated reporting to employees of financial institutions 

who are now required to immediately report suspected elder exploitation to 

either law enforcement or Adult Protective Services. 

4. The implementation of Operation Guardian by the California Attorney 

General's Office which since the year 2000 has been conducting surprise, onsite inspections of nursing homes. This operation has often led to the 

uncovering of financial exploitation of residents within a facility in addition to 

other incidents of neglect. 

In San Diego we have tried to replicate this multi-disciplinary concept in the following 

manner: 

l. Periodic lunchtime meetings are held throughout our County to discuss the latest 

trends and scams - in which we invite community partners to exchange 

information and receive updates. 

2. Trainings for first responders, the clergy and financial institutions in recognizing 

red flags of elder abuse. 

3. Promoting a public awareness campaign entitled "Silence is not golden" - so that 

the public is encouraged to call a 1-800 number when observing elder abuse 
59 

4. Offering comprehensive services to elderly crime victims through our San Diego 

Family Justice Center and Center for Community Solutions and funded by the not 

for profit Archstone Foundation. 

5. Launching a series of countywide events entitled "Protect yourself and your 

wallet" that provide education for seniors in the form of tips to avoid becoming a 

victim of physical and financial abuse. These seminars are organized by our local 

Adult Protective Services and the District Attorney's Office and are sponsored by 

two local Tribal governments. I am attaching to these remarks a copy of my 

financial exploitation "Top ten tips for seniors". 

I am convinced that collaboration by prosecutors with multiple agencies - where the local 

prosecutor's office takes the initiative - is the key to making an impact on the escalating 

financial crimes being committed against seniors. There are encouraging signs that 

prosecutors in several states are capturing the same vision but much more needs to be 

done. The National Center for State Courts has recently published an excellent resource 

guide for prosecutors entitled "Prosecuting Elder Abuse cases: Basic Tools and 

Strategies" funded by the Bureau of Justice Assistance. As more prosecutors take 

advantage of these training materials, we will see an improvement in how financial elder 

abuse cases are handled through criminal prosecution. 

We also need to eliminate aging discrimination and bias in our attitude towards 

prosecution of these cases. There has been a tendency in the past for prosecutors to fall 

into the trap of concluding that: 

1. Elders make poor witnesses in court 

2. Financial exploitation cases are difficult to prove because of mental capacity 

issues 

3. Cases involving home repair fraud allegations or misuse of Powers of Attorney 

are best dealt with as civil matters 

Prosecutors must find ways to rebut the standard defense that the elder either "loaned" or 

"gifted" the money to the suspect. Understanding the legal term of consent is at the core 

of such a case. California crafted a very enlightening jury instruction as follows: 

"To consent to a transaction a person must: 

Act freely and voluntarily and not under the influence of threats, force or duress; 

Have knowledge of the true nature of the act or transaction involved; 

Possess the mental capacity to make an intelligent choice whether or not to do 

something proposed by another person. 

And consent requires a free will and positive cooperation in act or attitude." 

Additionally, prosecutors have to learn how to overcome many elderly victims' 

reluctance to talk about the exploitation because of embarrassment or fear that such 

exposure might lead to the victim losing their financial independence. 

Moreover, prosecutors should be less concerned about the actual monetary loss and focus 

more on the underlying conduct by the perpetrator. It is frustrating when a case is rejected 

by a prosecutor's office because the loss involved does not meet the threshold for 
60 

prosecution. In my experience, theft of $500 can be as devastating to an elderly widow as 

a theft of $100,000. 

We also should examine ways in which to become more creative and assertive in the 

actual charges that are filed. For example, consider this hypothetical: An unlicensed 

contractor fraudulently persuades an elderly homeowner that major corrective work is 

required on the homeowner's roof. The crook enters the victim's kitchen and stands over 

the victim while he or she writes out a check. The work is unnecessary, inferior and 

causes damage to a previously good roof. In that situation we should be looking to not 

only charge the suspect with elder financial exploitation but also with residential 

burglary; and if the victim felt intimidated we should consider adding a robbery charge. 

Having prosecuted felony financial elder abuse cases for over sixteen years, I see the 

following areas as crucial in our nation's ability to react to the escalating problem of 

financial elder abuse: 

1. Immediate funding ofthe Elder Justice Act which was passed over two years ago 

but which has laid essentially dormant. Much has been achieved at the grass roots 

level in recent years - but we need some leadership and responsibility from the 

Federal branch of government in tackling financial elder abuse. 

2. We need to look at state laws dealing with elder exploitation. For example, we 

should be very concerned at the fact that convicted felons can easily get 

employment working as caregivers. Surely, more can be done to protect the 

unsuspecting public from hiring felons to look after an aging relative. 

Additionally, we should evaluate whether state laws relating to financial elder 

abuse are correctly earmarked as felonies rather than as misdemeanors. 

3. We should consider creating or expanding lists of mandated reporters of 

suspected financial elder abuse. Other logical mandated reporters would be health 

care workers, first responders, caregivers, medical personnel, the clergy, notary 

publics and wire transfer merchants. 

4. We need to make the court room more elder accessible and learn from such 

judges as Her Honor Judge Patricia Banks, Presiding Judge of the Elder Law 

Division in Cook County, Illinois who has gained national attention for the way 

she operates her Elder courts. 

5. All major urban communities should consider having a dedicated investigative 

law enforcement unit that handles elder abuse investigations. San Diego Police 

Department has had such a unit since 2000; it consists of five detectives and one 

sergeant. 

6. States should invest in more awareness campaigns so that the public knows 

exactly how and where to report financial elder exploitation quickly and 

efficiently. 

7. The creation of multi-disciplinary task forces in major urban areas involving 

federal, state and local law enforcement and adult protective agencies, as well as 

representatives from financial institutions and wire transfer merchants. Such task 

forces should be established primarily to provide a rapid response to any report of 

suspected elder financial exploitation involving an out of state or cross border 

suspect where monies have been wired. The local prosecutor's office should be 
61 

willing to seek extradition when a suspect is identified and there is a likelihood of 

a state prison commitment 

8. The establishing of a national database that tracks different types of elder 

financial exploitation cases and which offers useful contact infonnation allowing 

procedures such as obtaining bank records to be expedited. 

I last addressed this committee in 2007. Since that time we have made progress both 

locally and across the country in developing strategies to combat the rising tide of elder 

exploitation. But I am also aware that the crooks and con artists are becoming more 

creative and daring in their efforts to deplete the life savings of our senior citizens. It is 

therefore time for us to go on the offensive in identifying, investigating and prosecuting 

these suspects. We must expand our multi - disciplinary programs, eliminate 

misconceptions regarding hurdles to successful prosecution of elder financial abuse, and 

seek the kind of justice that our seniors deserve. 

Paul Greenwood 

Deputy District Attorney 

Head of Elder Abuse Prosecutions 

San Diego District Attorneys Office 
62 

TEN TIPS TO HELP YOU REDUCE THE RISK OF BECOMING 

THE NEXT VICTIM OF FINANCIAL ELDER ABUSE 

1) CHOOSE A CAREGIVER WITH CAUTION 

Do not assume that by hiring a caregiver through a bonded agency you are 

guaranteed to get someone who has been checked. There is no current 

law requiring mandatory background checks for in-home caregivers in 

California. 

2) KEEP AN INVENTORY OF ALL JEWELRY 

Jewelry is the number one item that is stolen from homes occupied by 

elders. Not only should your jewelry be kept in a locked drawer, you should 

have photographs of rare, valuable or sentimental items in a separate 

location. In the event of theft, such photographic evidence will be useful in 

tracking down the missing jewelry at a pawn shop. 

3) EVERY HOME SHOULD HAVE A SHREDDER 

Every piece of mail containing your name, address and any other identifying 

information should be shredded before being discarded. The most effective 

type of shredder is the criss-cross cut shredder. Even envelopes with your 

name and address should be Shredded. Never throwaway old checkbooks 

from closed accounts or bank credit card application forms. There is no 

danger in over shredding! 

4) PROTECT YOUR INCOMING AND OUTGOING MAIL 

Never allow incoming mail to sit in an unsecured mailbox where the public 

have access. Mailbox theft is rampant Similarly, never leave outgoing mail 

In an unsecured mailbox with the red flag raised as this simply provides an 

easy alert to the thief who is cruising the streets. Consider either purchasing 

a locked mailbox or renting a post office from your local post office. 

5) OBTAIN A CREDIT SEARCH ON YOURSELF AT LEAST TWO 

OR THREE TIMES A YEAR 

Identity theft is rampant The only way to have peace of mind is to obtain a 

credit search on yourself periodically from one of the three major credit 

bureaus - Experian, Equifax and Trans Union. This will enable you to 

discover whether someone has applied for or obtained a credit card in 

your name. 

6) EVERY TELEPHONE SHOULD HAVE CALLER I.D. FITTED 

All modern telephones are equipped with Caller 1.0. capability and the 

minimal cost of this extra service is well worth it. By seeing if the incoming 
63 

call is classified as "private" or "unknown" this will allow you to be 

immediately on your guard. Crooks love the telephone. It is now their 

weapon of choice. 

7) YOU WILL NEVER WIN THE CANADIAN LOTTERY 

If a smooth talking 25 year old male tells you on the telephone that you are 

the proud winner of the Canadian lottery, he is a liar. Similarly, if you get an 

email from Nigeria or letter from Madrid indicating that you could receive a 

substantial amount of money, such communications are always fraudulent. 

Do not dabble!! 

8) CONSIDER ALLOWING YOUR BANK TO SEND A DUPLICATE 

COpy OF YOUR MONTHLY STATEMENT TO A TRUSTED 

FAMILY MEMBER OR PROFESSIONAL ADVISOR 

Sadly, most financial elder abuse cases are only reported or discovered 

six to nine months after the initial losses have occurred. Elders whose sight 

is failing are at greater risk because they may rely upon the very person who 

is stealing from them to insure that the financial transactions are in order. 

An independent pair of eyes that is able to look over bank statements every 

30 days will be able to catch suspicious activities in the early stages. 

9) DON'T ASSUME THAT THE FRIENDLY HANDYMAN IS IN FACT 

LICENSED 

Before committing to any work on your home, always obtain at least three 

estimates in writing and check on the name of the contractor with both the 

Better Business bureau and with the State License Contractor's Board. Just 

because someone gives you an impressive business card with a contractor's 

license number on it, this does not mean that the person is qualified. The 

license number may have in fact been stolen. Additionally, never pay more 

than 10% of the contract price up front. 

10) ALWAYS HAVE A SECOND LINE OF DEFENSE AT YOUR FRONT 

DOOR 

You should either have a locked screen door or a security chain guard at 

your front door. Crooks will attempt to gain entry to your home by using 

excuses such as a fake emergency, or false uniforms and badges. By 

having a second line of defense, you will be able to communicate with the 

stranger on the doorstep without exposing yourself to the possibility of a 

forced entry. Never allow any stranger into your home even if the 

emergency seems real. Instead, tell the stranger that you will call 911. 
64 

Question Submitted by Senator Wyden for Mr. Abagnale 

1. In your view, sir, do you think opening the Medicare Database to the public - with 

seniors' personal information private, of course - would help the cause of fraud 

prevention? Senator Grassley and I have a bill that would do just that, and we have 

heard from folks who say that making those records public would shine light on 

abnormalities that may in fact be signs offraudulent behavior. What is your take 

on that and how might opening the database change the dynamic of fighting fraud 

within the system? 

Answer: 

I am 100% in support of creating this Medicare Database. I believe it will go a long way to 

combating and detecting the ongoing enormous amount of fraud committed by healthcare 

providers. It could also be a deterrent to healthcare providers from filing false and 

fraudulent claims if they knew their claims were open to public review and scrutiny. In 

considering this database, the patient's personal information must remain private. 
65 

Questions Submitted by Senator Wyden for Mr. Humphrey 

1. Along with having the living facilities help identify exploitation after the fact, have 

you looked at initiatives to have them help prevent it in the first place by better 

controlling who has access to their resident populations? 

Answer: 

In our manual for operators of congregate living facilities, we will provide guidance on 

prevention and deterrence of elder financial exploitation-not just addressing it after the 

fact. For example, the manual will provide suggested agendas for staff training as well 

as resident and family council meetings that raise awareness of elder financial abuse and 

provide prevention tips. It will suggest protocols for safeguarding resident funds (such 

as procedures for releasing funds from a resident's personal needs account and 

documenting the identity of agents under power of attorney and other fiduciaries). These 

suggested practices will help limit access to residents and their assets. 

2. We've also heard that online exploitation of seniors is on the rise, and internet 

scams are becoming more complex and harder to detect. Is your office working on 

anything specifically targeted towards educating seniors about online threats? 

Answer: 

Yes, we plan to include specific information about internet scams and tips for avoiding 

them in our Money Smart for Older Americans consumer education program (in 

collaboration with another federal regulator, the Federal Deposit Insurance Corporation). 

We address these issues in meetings with federal and state government partners, nonprofit organizations, and the public. 
66 

GAO 

November 2012 

GAO-13-110 

United States Government Accountability Office 

Report to Congressional Requesters 

ELDER JUSTICE 

National Strategy 

Needed to Effectively 

Combat Elder 

Financial Exploitation 

GAO 

Accountability 1< Integrity 1< Reliability 
67 

ELDER JUSTICE 

National Strategy Needed to Effectively Combat 

Elder Financial Exploitation 

What GAO Found 

Officials in each of the four states GAO contacted identified the need for more 

safeguards and publjc awareness activities to help prevent elder financial 

exploitation, They also noted that it is difficult to prevent exploitation by 

jndividuals such as financial services providers, power of attorney agents, 

guardians, and paid in-home caregivers, Although states have primary 

responsibility for combating elder financial exploitation, the federal government 

could disseminate information on model power of attorney legislation, for 

example, to help states better safeguard against power of attorney abuse-one 

type of federal activity authorized under the Older Americans Act of 1965, In 

addition, experts and state and local officials told GAO that many older adults 

need more information about what constitutes elder financial exploitation in order 

to report and avoid it. The seven federal agencies GAO reviewed have 

undertaken activities to increase public awareness of elder financial exploitation. 

While some experts observed that a nationwide approach to educating the public 

is needed, federal pub!Jc awareness activities are not currently conducted as part 

of a broader coordinated approach, which GAO believes could help ensure the 

effective use of federal resources The Elder Justice Coordinating Council, which 

held its first meeting in 2012, could be the vehicle for developing and 

implementing a coordinated national strategy, The Council is composed of 

officials from federal agencies and is charged with developing national priorities 

and coordinating federal elder justice activities. 

Experts and officials in each state GAO reviewed indicated that difficulty 1) 

gaining expertise, 2) sustaining collaboration between law enforcement and adult 

protective services agencies, and 3) obtaining data hinders their response to 

eider financial exploitation. As with prevention, many federal agencies have 

individually taken steps to address these challenges that are in line with their own 

missions, For example, the Department of Justice (Justice) has begun to 

construct a website that contains training and other materials prosecutors can 

use to build their expertise in investigating and prosecuting elder abuse. which 

includes elder financial exploitation. However, there are gaps in federal support 

in some areas. For example, law enforcement officials in each of the four states 

GAO reviewed indicated that it is not ciear how they should obtain the federal 

support they need to respond to interstate and International cases. Justice can 

provide this information, in keeping with its priority to strengthen its relationship 

with state and local !aw enforcement. Similarly, the Federal Trade Commission's 

(FTC) Consumer Sentinel Network database compiles incidents of financial 

exploitation reported to it by many sources around the country but receives 

incidents from state government agencies in only 12 states, The database would 

be of greater use if FTC obtained incidents from more of the states and 

contained an indicator that the incident involved an older adult. 

_____________ United States Government Accountability Office 
68 

Contents 

Letter 

Background 4 

States Identified the Need for More Safeguards and Public 

Awareness Activities to Prevent Elder F1nancial Exploitation 12 

Difficulty Gaiulng Expertise, Sustaiulng Collaboration, and 

Obtaining Data Hinders States' Responses to Elder Financial 

Exploitation 22 

Conclusions 38 

Recommendations for Executive Action 39 

Response to Agency Comments 41 

Appendix I Administration on Aging 44 

Appendix II Consumer Financial Protection Bureau 45 

Appendix III Federal Trade Commission 46 

Appendix IV Financial Crimes Enforcement Network 47 

Appendix V Department of Justice 48 

Appendix VI Federal Bureau of Investigation 49 

Appendix VII U.S. Attorneys 50 

Appendix VIII U.S. Postal Inspection Service 51 

Pagel GA0-13--110 Elder Financial exploitation 
69 

Appendix IX Securities and Exchange Commission 52 

Appendix X Examples of State and Local Activities to Prevent and 

Respond to Elder Financial Exploitation 53 

Appendix XI Examples of Non-Governmental Organization Activities to 

Prevent and Respond to Elder Financial Exploitation 58 

Appendix XII Criminal Background Check Requirements for In-home 

Caregivers in Selected States 63 

Appendix XIlI Resource Centers Supported by the Administration on Aging 64 

Appendix XIV Example of a Letter Promoting a Fraudulent Sweepstakes 

Scheme 65 

Appendix XV Total Number of FTC Consumer Sentinel Network 

Complaints by Source, CY 2011 66 

Appendix XVI Comments from the Consumer Financial Protection Bureau 67 

Appendix XVII Comments from the Department of Health and Human 

Services 70 

Appendix XVIII GAO Contacts and Staff Acknowledgements 72 

Pag.1I GAO~13-110 Elder Financial exploitation 
70 

Related GAO Products 73 

Tables 

Table 1: Examples of Fonus of Elder Financial Exploitation by 

Type of Perpetrator 4 

Table 2: Selected Public Awareness Efforts of Federal Agencies 

Related to Elder Financial Exploitation 21 

Table 3: Examples of AoA and Justice Resources That Could Be 

Used to Increase State and Local Expertise about Elder 

Financial Exploitation 24 

Table 4: Examples of Federal Grants That Encourage Collaboration 

among State Agencies That Respond to Elder Abuse 27 

Table 5: Federal Administrative Data Systems That Collect 

Incidents of Elder Financial Exploitation 36 

Figures 

Figure 1: State and Federal Systems and Agencies Positioned to 

Combat Elder Financial Exploitation' 6 

Figure 2: Federal Agencies with Missions That Involve Combating 

Elder Financial ExplOitation 8 

Figure 3: Federal Agencies' Responsibilities in Combating 

International and Interstate Financial Crimes 30 

Pagelfl GAO~13R110 Elder FinancJaJ Exploitation 
71 

Abbreviations 

AoA 

APS 

CFPB 

CDAA 

Consumer Sentinel 

HHS 

Justice 

EFPN 

EJA 

EJCC 

FTC 

FinCEN 

FINRA 

NASAA 

NCEA 

Office for Older 

Americans 

OAA 

RFPA 

SEC 

SAR 

Administration on Aging 

Adult protective services 

Bureau of Consumer Financial Protection 

(commonly referred to as the Consumer Financial 

Protection Bureau) 

California District Attorneys Association 

Consumer Sentinel Network database 

Department of Health and Human Services 

Department of Justice 

Elder Financial Protection Network 

Elder Justice Act of 2009 

Elder Justice Coordinating Council 

Federal Trade Commission 

Financial Crimes Enforcement Network 

Financial Industry Regulatory Authority 

North American Securities Administrators 

National Center on Elder Abuse 

Office for the Financial Protection of Older 

Americans 

Older Americans Act of 1965 

Right to Financial Privacy Act of 1978 

Securities and Exchange Commission 

Suspicious Activity Report 

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 pennission from GAO. However, because this work may contain copyrighted images or other material, pennission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 

Page Iv GAC)..13·110 Elder Financial Exploitation 
72 

United States Government Acconntabillty Office Washington, DC 20648 

November 15, 2012 

Congressional Requesters 

Elder financial exploitation is the illegal or improper use of an older adult's 

funds, property, or assets.' Experts have described it as an epidemic with 

society-wide repercussions. Perpetrators may be family members; paid 

home care workers; those with fiduciary responsibilities, such as financial 

advisors or legal guardians; or strangers who inundate older aduHs with 

mail, telephone, or Internet scams. Older adults are particularly 

vulnerable to financial exploitation because, as research has shown, 

financial decision-making ability decreases with age. Moreover, older 

aduHs are often ashamed to report exploitation or even admit that they 

have been exploited because they are afraid of losing their 

independence. As a result, existing data on elder financial exploitation 

may substantially underestimate its extent. 

Elder financial explOitation has far-reaching effects on its victims in 

particular and society in general. A study of media reports from April to 

June 2010 estimated that financial exploitation cost older adults at least 

$2.9 billion in 2010. 2 The money that older adults lose in these cases is 

rarely recovered, and the loss can undermine both the health of older 

adults and their ability to support or care for themselves. Consequently, 

the burden of caring for exploited older adults may fall on various state 

and federal programs. For example, a review of 80 elder financial 

exploitation cases in Utah in 2010 found the state's Medicaid program 

would potentially have to pay about $900,000 to cover the cost of care for 

older aduHs in that state who had suffered substantial losses. 3 

1 See GAO, Elder Justice: Stronger Federal Leadership Could Enhance National 

Response to Elder Abuse, GA()"11·208 (Washington, D.C.: March 2, 2011). 

2 MetLife Mature Market Institute et. aI., The MetLife Study of Elder Financial Abuse: 

Crimes of COcasion, OesperaUon, and Predation against America's Elders (2011). The 

study assumed that the approximately $530 mHiion in loss from all forms of elder financial 

abuse occurred at the same rate for the other 9 months of the year. It further assumed 

that this loss would be the same for the 36 percent of articles about elder financial abuse 

that the study}dentified but did not Cite a specific dollar figure for. 

3 Gunther, Jilenne, The 2010 Utah Cost of FinanCial Exploitation, Utah Division of Aging 

and Adult Services (2012). 

Pagel GAO·13~110 Elder Financial ExploltaUon 
73 

As the U.S. population ages, growing numbers of older adults could be at 

risk of financial exploitation, so its potential impact on society is likely to 

increase. Combating elder financial exploitation is primarily the 

responsibility of state and local agencies. At the same time, however, 

multiple federal agencies have a role to play in supporting state and local 

efforts. In light of these growing concerns, we were asked to provide 

information on elder financial exploitation issues. Specifically, this report 

addresses the challenges states face in (1) preventing and (2) responding 

to elder financial exploitation, as well as the actions some federal 

agencies have taken to help states address these challenges. 

To address these objectives, we interviewed officials from agencies that 

included state and local social services, criminal justice, and consumer 

protection agencies in California, Illinois, New York, and Pennsylvania. 

We selected these states to achieve variation in location, because of the 

large size of their elder population, and because each state had a number 

of initiatives to combat elder financial exploitation. Across the four states, 

we held interviews with representatives from entities such as state and 

local adult protective services (APS) agencies; offices of attorneys 

general; police and sheriffs' departments; local district attorneys and 

courts; and state banking, securities, and insurance regulators. In three of 

the four states we also spoke with private organizations that work on 

issues related to elder financial exploitation, such as a university research 

center, elder abuse forensic center, and state banking association. In 

Pennsylvania, we met with experts from the Institute on Protective 

Services at Temple University and also attended an elder financial 

exploitation training for APS workers that was hosted by the Institute. We 

focused only on financial exploitation of older aduns living at home, not on 

older adults in long-term care facilities. 

We also interviewed experts in the field of elder abuse-including 

academics and practitioners-and representatives from a variety of nonprofit and private sector organizations, such as the AARP, American Bar 

Association, and American Bankers Association. We interviewed 

representatives from University of California at Irvine's Center of 

Excellence on Elder Abuse and Neglect and the University of Kentucky's 

Justice Center for Elders and Vulnerable Adults. In addition, in order to 

gain the perspectives of large national and small community banks, we 

interviewed offiCials at six financial institutions. These banks are not, 

however, representative of banks nationwide. 

Furthermore, we interviewed officials and analyzed strategic plans and 

other documents from seven federal agenCies-including the 

Page 2 GAO·13·110 Elder Financial exploitation 
74 

Administration on Aging (AoA) within the Department of Health and 

Human Services (HHS), Bureau of Consumer Financial Protection 

(commonly referred to as the Consumer Financial Protection Bureau or 

CFPB), Department of Justice (Justice), Federal Trade Commission 

(FTC), Financial Crimes Enforcement Network (FinCEN) within the 

Department of the Treasury, Postal Inspection Service, and Securities 

and Exchange Commission (SEC). In total, we held dozens of interviews 

with experts and officials from federal, state, local, and non-governmental 

organizations. 

We also reviewed relevant federal laws and regulations, as well as 

selected state laws. Moreover, we attended the initial meeting of 

members of the Elder Justice Coordinating Council (EJCC), which 

includes officials from 11 federal agencies with an interest in elder abuse. 

We also attended several conferences related to elder financial 

exploitation, including the American Society on Aging's 2012 Aging in 

America Conference, California District Attorneys Association's (CDAA) 

2011 Elder Abuse Symposium, Stanford Center on Longevity and the 

Financial Industry Regulatory Authority's (FINRA) 2011 State and Future 

of Financial Fraud Conference, Elder Financial Protection Network's 

(EFPN) 2012 Call to Action Conference, and a 2011 webcast on elder 

issues hosted by the Nebraska Department of Health and Human 

Services and State Bar Association's 2011 Elder Issues Webcast. At the 

CDAA Symposium, we held small group meetings with district attorneys 

and investigators from various counties in California. And at the EFPN 

Conference we held a small group meeting with local district attorneys, 

advocates, a state insurance agency official, and a financial institution. 

To illustrate the complexities of combating elder exploitation, we met with 

a social service agency, several criminal justice agencies, and, in one 

case, a family member to develop detailed case histories on six 

prosecuted cases of elder financial exploitation. The perpetrators in these 

cases were family members, financial services providers, or telephone 

scammers. We identified cases from news stories and internet searches. 

We selected six cases because they (1) occurred in three of our four 

review states (California, New York, and Pennsylvania), (2) involved each 

of the different types of elder financial exploitation (exploitation by family 

or trusted others, exploitation by financial services providers, and 

exploitation by strangers), and (3) included instances where more than 

one agency or system was involved. The cases we selected are a nongeneralizable sample of elder financial exploitation cases. 

Page 3 GAO~1:J..110 Elder Financial Exploitation 
75 

Background 

Lastly, we identified and reviewed research published from 2000 onward 

on elder financial abuse or elder financial exploitation by searching 

numerous bibliographic databases and reviewing materials cited by elder 

abuse experts or published by federal, state, and non-governmental 

organizations. We focused our review on published research on the 

extent, impact, cost, and nature of elder financial exploitation. We also 

interviewed an official from the Utah Division of Aging and Adult Services 

to discuss the state's study on the cost of elder financial exploitation. 

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 

ofthe Inspectors General for Integrity and Efficiency. 

Elder financial exploitation, one type of elder abuse, can occur in 

conjunction with, and might lead to other types of elder abuse. 4 Financial 

exploitation of older adults can take many forms and perpetrators can 

include family members, friends, legal guardians, paid caregivers, and 

strangers. Table 1 provides some examples. 

Table 1: Example. of Fonna of Elder Financial Exploltallon by Type of Perpetrator 

Perpetrators Fonns 

Family members, friends, In-home caregivers, -Theft of cash or other valuables 

legal guardians, representative payee.-, etc. -Withdrawals from bank accounts or use of credit cards 

-Transfer of deeds 

-Misuse of an older adult's power of attorney 

-Misappropriation of an incapacitated older adult's income or assets 

-Identity theft 

" Other types of elder abuse include physical, psychological, and sexual abuse, as well as 

neglect and seW-neglect. 

Page 4 GAO·13-110 Elder F1nanclai Exploitation 
76 

Perpetrators 

Financial .ervic .. providers (brokers, 

financial advisors, Insurance agents, or 

others In the financial .. rvlce. Industry) 

Strangers 

Fo"". 

-Sale of fraudulent investments (Ponzi or pyramid schemes) 

-Sale of financial products or services unsuitable for an older adutt's 

circumstances, such as long~term annuities 

-Lottery, mail, telephone, or Internet scams 

-Door~to-door home repair scams 

-Identity theft 

Source: GAO analysil ofpubli$h$d teMllreh 

-Representative payees are persons who receive Social Security benefits on behalf of recipients who 

are deteonined to be incapable of managing their finances. 20 C.F .R. §§ 416.601 and 416.2001. 

Older adutts are particularly attractive targets for financial exploitation by 

unscrupulous individuals. As a group, older adults tend to possess more 

wealth than those who are younger because they have had a longer time 

to acquire it. In addition, the incidence of Alzheimer's disease and other 

dementias that undermine judgment increases with age. 5 Moreover, 

financial capacHy-the capacity to manage money and financial assets in 

ways that meet one's needs-generally declines with age, and this 

decline may go unaddressed until H is too lateS 

State and local agencies in the social services, criminal justice, and 

consumer protection systems in each state are at the forefront of efforts 

to prevent, detect, and respond to elder financial exploitation. Seven 

federal agencies whose missions correspond to the state and local social 

service, criminal justice, and consumer protection systems are positioned 

to contribute to state and local efforts in this area: AoA, CFPB, Justice, 

FTC, FinCEN, SEC, and the Poslallnspection Service (see fig. 1).7 

5 Hebert at a!., ~Alzheimer Disease in the US Population," Archives of Neurology, 60 

(August 2003): 1119-1122. 

S AgalWal at at, ~The Age of Reason: Financial Decisions over the Life Cycle with 

Implications for Regulation: Brookings Papers on Economic Activity 2 (Washington, D. C.: 2009): 51-117. 

7 See appendixes I through IX for additional infonnation on each of these agencies. The 

Department of Housing and Urban Development (HUD) also functions as a federal 

consumer protection agency in that they administer the Home Equity Conversion 

Mortgage Program, the nation's largest reverse mortgage program for older adults. 

PageS GAO·13-110 Elder Financial exploitation 
77 

Figure 1: State and Federal Systems and Agencies Positioned to Combat Elder Financial Exploitationa 

Sauro, GAO ana}ysl$ of agsf1cy ml(Jfmal'(Jn 

• The relationship between the federal and the state and local agencies in a given system varies 

b State attorneys general also playa consumer protection role 

~ ,justice also plays a consumer protection role 

PageS GAO~13~110 Elder Financial Exploitation 
78 

At the state and local level, APS agencies investigate and substantiate 

reports of suspected elder abuse, including financial exploitation and, if 

the client agrees to accept help, can arrange for services to secure their 

safety and meet their basic needs. APS can also refer cases to law 

enforcement agencies or district attorneys for criminal investigation and 

prosecution. Whether an elder financial exploitation case comes to the 

attention of criminal justice authorities through referral from APS or some 

other means, law enforcement agencies and district attorneys can 

exercise broad discretion when deciding if a case warrants any action on 

their part. 

State-level consumer protection agencies-such as banking, securities, 

and insurance regulators-conduct examinations to ensure that rules to 

protect consumers are followed and take enforcement actions against 

institutions that break the rules. State attorneys general may also 

prosecute cases or respond to consumer protection inquiries. 

Although combating elder financial abuse is explicitly included in the 

mission of only one federal agency, CFPB's Office for the Financial 

Protection of Older Americans (Office for Older Americans), it is implicit in 

the mission of others that work to combat elder abuse, protect consumers 

or investors, or prevent fraud (see fig. 2). 

Page 7 GAO-13~110 Elder Flnancfal exploitation 
79 

Figure 2: Federal Agencies with Missions That Involve Combating Elder Financial Exploitation 

Federal legislation has established a foundation for the federal 

government to assume a leadership role in combating elder abuse, 

including elder financial exploitation, and basis for greater coordination 

Page 8 GAO·13·110 Elder Financial Exploitation 
80 

across federal agencies in this area. The Older Americans Act of 1965 

(OAA)8 requires AoA to develop objectives, priorities, policy, and a longterm plan for 

• facilitating the development, implementation, and continuous 

improvement of a coordinated, multidisciplinary elder justice system in 

the United States; 

promoting collaborative efforts and diminishing duplicative efforts in 

the development and carrying out of elder justice programs at the 

federal, state, and local levels; 

establishing an information clearinghouse to collect, maintain, and 

disseminate information concerning best practices and resources for 

training, technical assistance, and other activities to assist states and 

communHies to carry out evidence-based programs to prevent and 

address elder abuse, neglect, and exploitation; 

• working with states, Justice, and other federal agencies to annually 

collect, maintain, and disseminate data on elder abuse, neglect, and 

exploitation, to the extent practicable; 

• establishing federal guidelines and disseminating best practices for 

uniform data collection and reporting by states; 

• conducting research on elder abuse, neglect, and exploitation; and 

• carrying out a study to determine the extent of elder abuse, neglect, 

and exploitation in all settings.' 

The Elder Justice Act of 2009 (EJA) '0 contains provisions pertaining to 

APS as well as elder justice, in general. It authorizes funding for 

8 PUb. L. 89-73, 79 Stat. 218 (codified as amended at 42 U.S.C. §§ 3001.3058ff). 

'42 U.S.C. §3011(e)(2). 

10 Pub. L. No. 111·148, tit. VI, subtit H, 124 Stat. 119, 782·804 (2010)(codified at 42 

U.S.C. §§ 1320b-25, 1395i-3a, and 1397j·1397m-S). The EJA was enacted as part of the 

Patient Protection and Affordable Care Act, which was signed into law on March 23, 2010. 

Page 9 GAO·13-110 Elder Financial exploRation 
81 

HHSto 

o annually collect and disseminate data regarding elder abuse, 

neglect, and exploitation of elders in coordination with 

Justice;" 

o develop and disseminate information on best practices and 

provide training for carrying out aduH protective services; 12 

o conduct research related to the provision of adult protective 

services; 13 

o provide technical assistance to states and others that provide 

or fund the provision of adult protective services; 14 and 

o establish 10 elder abuse, neglect, and exploitation forensic 

centers, in consultation with Justice, that would (1) conduct 

research on forensic markers for elder abuse, neglect, or 

exploitation, and methodologies for determining when and how 

health care, emergency, social and protective, and legal 

service providers should intervene and when these cases 

should be reported to law enforcement; (2) develop forensic 

expertise regarding elder abuse, neglect, and exploitation; and 

(3) use the data they have collected to develop, in coordination 

with Justice, the capacity of geriatric health care professionals 

and law enforcement authorities to collect forensic evidence, 

including evidence needed to determine if elder abuse, 

neglect, or exploitation has occurred. 15 

"§ 2042(a)(1)(6) and (2).124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(B) and 

(2». 

12 § 2042(a)(1)(C), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(C». 

13 § 2042(a)(1)(D), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(D». 

14 § 2042(a)(1)(E), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(E». 

15 § 2031, 124 Stat. 790-91 (codified at 42 U.S.C. § 13971). 

Page 10 GAO-13--110 Elder Financial ExplOitation 
82 

Grants to state and local governments for demonstration projects that 

test methods and training to detect or prevent elder abuse or financial 

exploitation; ,. and 

• An Elder Justice Coordinating Council and an Advisory Board on 

Elder Abuse, Neglect, and Exploitation to develop priorities for the 

elder justice field, coordinate federal activHies, and provide 

recommendations to Congress. 17 

Currently, the Elder Justice Coordinating Council consists of the following 

federal agencies: Consumer Financial Protection Bureau, Corporation for 

National and Community Service,'8 Department of Health and Human 

Services, Department of Housing and Urban Development, Department of 

Justice, Department of Labor, Department of the Treasury, Department of 

Veterans Affairs, Federal Trade Commission, Postal Inspection Service, 

and Social Security Administration. 

Coordination among federal agencies is also a feature of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act, which established 

CFPB, requiring n to coordinate its consumer protection efforts of older 

adults with other federal agencies. 19 CFPB's Office for Older Americans is 

charged with facilnating the financial literacy of seniors on protection from 

unfair, deceptive, and abusive practices and on current and future 

financial choices." 

,. § 2042(c). 124 Stat. 795 (codified at 42 U.S.C. 1397m-l(c)). 

17 §§ 2021 and 2022. 124 Stat. 786-89 (ccdified at 42 U.S.C. §§ 1397k and 1397k-l). 

18 The Corporation for National and Community Service is a federal agency that engages 

Americans in service through Senior Corps, AmeriCorps, and the Social Innovation Fund. 

42 U.S.C. § 12651. 

19 Pub. L. No. 111-203, § 1015,124 Stat. 1376, 1974 (2010) (codified at 12 U.S.C. § 

5495). 

20 § 1013(9)(1). 124 Stat. 1973 (codified at 12 U.S.C. § 5493(9)(1». 

Page 11 GAO·13--110 Elder FInancial exploitation 
83 

States Identified the 

Need for More 

Safeguards and Public 

Awareness Activities 

to Prevent Elder 

Financial Exploitation 

States Cited Need for More 

Safeguards to Prevent 

Elder Financial 

Exploitation 

Financial Services Providers 

According to officials in the four states we visited, financial exploitation of 

older adults by financial services providers, power of attorney agents, and 

in-home caregivers is particularly difficult to prevent. 21 

Older adults may consult with a variety of financial professionals, such as 

financial planners,22 broker-dealers,>' and insurance agents?' However, 

21 See appendix X for examples of activities undertaken by APS, Climlnal justice, and 

consumer protection agencies in California, illinois, New York, and Pennsylvania to 

prevent elder financial exploitation by financial services providers, power of attorney 

agents, and in-home caregivers. See appendix XI for examples of these activities 

undertaken by private organizations. 

22 Financial planners can provide a variety of services, including preparing financial plans 

for clients based on their financial circumstances and objectives and making 

recommendations for specific actions clients may take. In many cases, financial planners 

also help implement these recommendations by, for example, selling investment products, 

such as insurance, securities, or other investments. Financial planners are subject to 

federal and state regulation pertaining to investment advisers, broker-dealers, and 

insurance agents, depending on the services they provide. See GAO, Consumer Finance; 

Regulatory Coverage Generally Exists for Financial Planners, but Consumer Protection 

Issues Remain, GAO-11-235 (Washington, D.C.: January 18, 2011). 

23 Broker-dealers handle trades between the buyers and seUers of securities and charge a fee to do so. Broker-<iealers may buy securities from customers or sell from their own 

Inventory. Most are also members of the Fmanciallndusl!y Regulatory AuthOrity (FINRA). 

FINRA Is a self-regulatory organization with oversight of all broker-dealers doing buslne .. 

with the public In the United States. 

24 Insurance agents sen products, such as life insurance or annuities. They must be 

licensed by the states to sell these products and are subject to stata insurance regulation. 

The sale of variable insurance products, such as variable life insurance or variable 

annuities, is subject to both state insurance regulation and broker-dealer regulation. See 

GAO-11-235. 

Page 12 GAO-13-110 Elder Financial Exploitation 
84 

older adults, similar to other consumers, may lack the information to make 

sound decisions about choosing a financial services provider and 

protecting their assets from exploitation. As a result, they may 

unknowingly put themselves at risk of financial exploitation. 

Individuals who present themselves as financial planners may adopt a 

variety of titles and designations. In some cases, privately conferred 

designations-such as Certified Financial Planner®-require formal 

certification procedures, including examinations and continuing 

professional education credtts, while other designations may merely 

signify that membership dues have been paid. Designations that imply 

expertise in advising older adults have been a source of particular 

concern among state securities regulators, according to the North 

American Securities Administrators Association (NASAA).25 Older adults 

may lack information to distinguish among the various senior specific 

designations. Indeed, in 2011, we reported that there is some confusion 

about what these titles mean and the level of skill required to obtain 

them"· 

Exploitation by IISenior Specialisf' 

Calling himself a senior financial advisor, an insurance agent licensed in California met 

an 89-year-old partialiy blind, intennittently confused man at a senior center. The 

agent persuaded him to invest about $250,000 in a flexible premium deferred annUity, 

warning him not to let anyone talk him out of it As a result, the man was left with no 

penalty-free access to his entire life savings for the next 11 years, while the agent 

earned a commission on this transaction. To earn about $16,000 more in 

commissions, the agent then convinced the man to move half the amount invested in 

the annuity into unregistered stock, which cost the man a surrender fee of about 

$10,000. The stock turned outto be worthless. leaving the man with a fraction of what 

he had when he met the agent Attempts by the man's nephew to retrieve his uncle's 

money were unsuccessful. The nephew reported the insurance agent to the California 

Department of Insurance, which eventually revoked the agent's license, but local 

police did not pursue the older adult's case. While the insurance agent faced no 

criminal charges in this case, he was later sentenced to 3 years in prison for 

defrauding another older adult. 

Another concern is that older adutts may be fooled by investment 

professionals who use questionable tactics to market financial products, 

25 NASAA is a national membership organization for state securities regulators. 

2. See GAO-11-235. 

Page 13 GAO·13·110 Elder Flnanclal exploitation 
85 

such as 'free lunch seminars" at which financial professionals seek to sell 

financial products to older adults during a free meal. SEC, the Financial 

Industry Regulatory Authority (FINRA), and NASAA examined 110 firms 

that sponsored free lunch seminars from April 2006 to June 2007 offered 

in seven states and found that 63 seminars used misleading advertising 

and sales materials, 25 seminars resulted in unsunable 

recommendations, and in 14 seminars there were fraudulent practices 

used, such as selling fictitious investments.27 

Preventing the sale of unsuitable or fraudulent investments to older aduHs 

is difficult. 2. An investment can be unsuitable for an older aduH if it has 

features that might not provide its intended benefit during the investor's 

lifetime. Older adults also can be sold what they believe to be legitimate 

investments, but are actually completely fraudulent products that hold 

little or no value. 

Investment Fraud Using a uPonzl" Scheme 

The founder and president of a real estate and financial consulting firm convincad 

around 200 individuals-about one-third of whom were older adults-to invest in real 

estate projects that failed to generate any significant revenue. He also convinced them 

to obtain reverse mortgages on their homes, and to invest the proceeds with his firm. 

The investments tumed out to be a "PonziO scheme. Specifically, the perpetrator paid 

distributions to some investors from others' deposits; misled investors with false 

amortization schedules; and used investors' money to pay for his Porsche, mortgage, 

and other personal expenses. The scheme was reported to FINRA, investigated by the 

FBI, and prosecuted by the Eastern District of New Yorl< U.S. Attorney's Office, which 

sought sentencing enhancements for targeting the elderty. VICtims lost over $12 

million. They also reported irreplaceable financial losses, emotional distress, feelings 

of betrayal and disbelief, and various physical symptoms as a result. 

SEC has developed some educational materials and SEC and CFPB 

have conducted research related to investment fraud that targets older 

adults. For example, SEC has published a guide for older adults that 

counsels them to check their investment adviser's disciplinary history, 

lists warning signs of fraud, and provides information on where to go for 

27 SEC, FINRA, and NASAA, Protecting Senior Investors: Report on Examinalions of 

Securtties Finns ProViding "Free Lunch" Sales Seminars (2007). 

2. SEC, Guide for Seniors: Protect Yourself Against Investment Fraud; SEC, FINRA, and 

NASAA, Investor Alert, Investment Products and Sales Practices Commonly Used to 

Defraud Seniors: Slories from the Frontline. 

Page 14 GAO·13-110 Elde' Financial exploitation 
86 

Power of Attorney 

help.'" SEC also provides a link to a FINRA website that provides 

consumers with the required qualifications, including educational 

requirements, of the designations used by securities professionals. In 

August 2012, SEC released a study on financial literacy among investors 

and stated the agency's desire to develop a strategy for increasing the 

financial literacy of certain groups, including older adults. CFPB plans to 

issue a report in early 2013 to Congress and the SEC that will address 

providing information to older adults about financial advisors and their 

credentials. In June 2012, the CFPB issued a public inquiry for 

information about elder financial exploitation, including a question on what 

resources older adults have to determine the legitimacy, value, and 

authenticity of credentials held by investment professionals. 30 CFPB 

expects to share its resuHs in 2013. 

Older adults 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. Having a financial power of 

attorney enables an older adult (a principal) to choose the person who 

can legally make these decisions for them, when needed. Powers of 

attorney are easy for anyone to create, can vary in specificity and format, 

and do not require legal assistance or a court for execution. Each of the 

four states we contacted has a law that helps prevent misuse of powers 

of attorney by specifying the responsibilities of agents and, in at least one, 

penalties for misuse. However, powers of attorney can be forged or 

perhaps otherwise improperly obtained without a principal's knowledge or 

consent and an agent can easily use the principal's money for his or her 

own benefit. For this reason, many state and local officials we interviewed 

in the four states were concerned about misuse of these instruments. For 

example, one Pennsylvania official described power of attorney 

documents as a ·powerful, simple, and dangerous tool." 

2. SEC. Guide for Seniors: Protect Yourself Against Investment Fraud. 

3. CFPB. "Request for Information Regarding Senior Financial El<ploitation.· 77 Fed. Reg. 

36,491 (June 19. 2012). 

Page 15 GAOa13-110 Elder Financial Exploitation 
87 

Power of Attorney Abuse 

A month after an elderly man with dementia and his wife agreed to add thair 

daughter's name to their bank account, the daughter convinced her mother to sign a 

document providing her financial power of attorney. When the woman signed, she 

was in the hospital for a broken hip and a stroke and later claimed she was heavily 

medicated. Over tha next 3 months, tha daughter placed the deed to her parent's 

home in her name, wrote checks on their account totaling nearly $600,000 that were 

never questioned by the bank, and attempted to withdraw about $500,000 more. 

When the woman's son discovered what had been happening, he had the bank stop 

payment on the $500,000 and asked tha local district attorney to invastigate. The 

daughter was charged with numerous counts of theft, pled guilty, and was sentenced 

to 3 years probation. The deed was transferred back to the woman and although tha 

prosecutor sought rastitution, the $500,000 was not recoverable-it had been used to 

payoff the daughter's mortgage, country club membership, and other bills. 

Some APS and criminal justice officials we spoke to indicated that 

stronger state power of attorney laws could help prevent elder financial 

explOitation by agents. For example, Pennsylvania officials said that 

current state laws have been ineffective at (1) creating practices to 

monitor the activities of power of attorney agents and (2) encouraging 

banks to question power of attorney documents they find questionable. In 

California, law enforcement officials noted that notaries were not always 

held accountable for their role in signing power of attorney documents. 

To help strengthen state laws designed to prevent misuse of financial 

powers of attorney, the Uniform Law Commission" has developed the 

Uniform Power of Attorney Act, which 

explicHly defines the duties of the power of attorney agent, 

including fiduciary duties such as acting in good faith and keeping 

careful records; 

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; 

allows co-agents to be appointed for additional third-party 

oversight; and 

imposes liability on agents who violate the law, 

31 The Unifonn Law Commission is a state-supported organization that drafts model 

legislation to promote clarity and stability to clitical areas of state statutory law. 

Page 16 GAO-13-110 Elder Financial Exploitation 
88 

Guardians 

According to the Uniform Law Commission. 13 states have adopted the 

entire Uniform Power of Attorney Act. 32 Others have enacted various 

other power of attorney laws. For example. New York requires an agent 

to provide a full accounting to APS when it is investigating a report that 

the principal may be in need of protective or other services or the victim of 

abuse or neglect. If it is not provided within 15 days. APS can commence 

a special proceeding to compel the production of the information. Illinois 

has added safeguards for principals to its law and created additional court 

remedies for violations of the law. However. according to the Uniform Law 

Commission. a number of states have made no changes to laws 

governing powers of attorney since the Uniform Power of Attorney Act 

was published. 

Powers of attorney are generally regulated under state. not federal. law; 

however. AoA and CFPB are providing some information to states and 

power of attorney agents to help prevent power of attorney abuse. The 

AoA-supported National legal Resource Center co-sponsors trainings for 

states on the adoption of the Uniform Power of Attorney Act. Furthermore. 

the CFPB is developing a guide to educate "lay fiduciaries" -including 

guardians and agents under powers of attorney-about their 

responsibilities. and is planning to develop several state-specific lay 

fiduciary guides. scheduled for release in 2013. 

There are limited safeguards to protect older aduHs from abuse by 

guardians. who are granted authority by a state court to make decisions 

in the best interest of an incapacitated individual conceming his or her 

person or property. While guardians can playa key role in managing the 

assets of these older adults. we have noted in past reports that guardians 

are only subject to limited safeguards that could protect these older adults 

from financial exploitation. For example. local officials in California noted 

that it can be hard to determine whether a person applying to be a 

guardian is doing so to further his ward's best interests. We have also 

reported that few states conduct criminal background checks on potential 

guardians. Moreover. we have noted concerns with weak court oversight 

of appointed guardians. as well as poor communication between the 

32 According to the Uniform Law Commission, Alabama, Arkansas, Colorado, Idaho, 

Maine, Montana. Nebraska. Nevada, New Mexico. Ohio. Virginia. West Virginia, and 

Wisconsin have adopted the Uniform Power of Attorney Act 

Pag.17 GA()..13-110 Elder Financial Exploitation 
89 

Caregivers 

courts and federal agencies that have enabled guardians to chronically 

abuse their wards and/or others. 33 

Explonation by in-home caregivers was also cited by local APS officials, 

police, and district attorneys we spoke to as a type of abuse that is 

difficult to prevent. These caregivers range from personal care aides who 

provide non-medical assistance such as helping wnh laundry and 

cooking, to home health aides who check an older adult's vital signs or 

assist with medical equipment. In-home caregivers may be employed by 

a private company approved to provide services via a state's OAA34 

program or independently hired by older adults or their families. Caregiver 

services may also be covered under a state Medicaid program if the 

individual is eligible for Medicaid. 35 

Older adults may rely on and trust in-home caregivers, and some 

caregivers have used that relationship to exploit their clients. 36 For 

example, a caregiver may be given access to an older adult's ATM or 

credit card to help with banking or grocery shopping and later be found 

withdrawing money or purchasing items for themselves. As the population 

ages and public policies encourage older adults to remain in their homes 

for as long as practical, there will be an increased need for in-home 

caregivers. 

States are responsible for protecting older adults from explOitation by inhome caregivers, and safeguards vary by state. Police and district 

attorneys we interviewed were concerned that in-home caregivers are 

33 See GAO, Guardianships: Cases of Financial Exploitation, Abuse, and Neglect of 

Seniors, GAO-10-1046 (Washington, D.C.: September 30,2010), and GAO, IncapaCitated 

Adults: Oversight of Federal Fiduciaries and Coult-Appointed Guardians Needs 

Improvement, GAO-11-678 (Washington, D.C.: July 22, 2011). 

34 OM Title IIl-B provides funding for in-home services, such as personal care, chore, 

and homemaker assistance. 

35 42 U.S.C. § 1398d(a)(7). Medicaid is a joint faderal-state financing program for heaHh 

care services for certain low-income individuals. State Medicaid programs may cover 

home-based care, such as personal care and homemaker services, for Medicaid 

baneficiaries who nead help wI1h self-care due to disabilities or heafih conditions. 

3. According to AoA, many of those who exploit older adults are informal or family 

caregivers who are not employad or subject to background checks and this may ba a 

more difficult type of exploitation to prevent. 

PagelS GAO·13·110 Elder Financial Exploitation 
90 

subject to limited, if any, background checks. A California law 

enforcement official told us that caregivers suspected of exploiting older 

adults sometimes have a history of theft. While the Medicaid program 

requires states to develop and implement home care provider 

qualification standards, there is no federal Medicaid requirement for 

criminal background checks.37 According to the National Conference of 

State Legislatures, while many states have required agencies to conduct 

background checks before employing in-home caregivers who are paid by 

Medicaid or with other state funds, these laws vary greatly in their breadth 

and scope and the amount of flexibility afforded the agencies when they 

use the checks to make hiring decisions. 3• Napa County, California 

recently initiated an innovative paid in-home caregiver screening initiative. 

Before in-home caregivers can work in that county, they must submit to a 

background check and obtain a permit annually. 39 

While background checks for in-home caregivers help flag potential 

abusers, an AARP study has found that states do not always use all 

available federal, state, and local criminal data systems. For one, the 

implementation cost may discourage their use. Moreover, their 

effectiveness in reducing elder abuse, in general, is unproven. 40 As 

required by the Patient Protection and Affordable Care Act of 201 0,41 the 

Centers for Medicare and Medicaid Services implemented the National 

Background Check Program that encourages states to adopt safeguards 

to protect clients of in-home caregivers. This voluntary program provides 

grants to states to conduct background checks for employees of longterm care facilities and providers, such as home health agencies and 

37 States must enact standards for provider participation to ensure that providers are 

qualified, effective, and cost-efficient, and to protect program beneficiaries. At the same 

time, these requirements must not unfairly restrict participation in the Medicaid program. 

As long as states meet these criteria, they have significant latitude in specifYing their 

provider qualification requirements. AARP Public Policy Institute, Safe at Home? 

Developing Effective Criminal Background Checks and Other Screening Policies for Home 

Care Womers (September 2010). 

38 National Conference of State Legislatures. State Policies on Criminal Background 

Checks for Medicaid-Supporied In-Home Direct Care Wome,. (December 18. 2008). 

39 See appendix XII for examples of background check requirements for in-home 

caregivers in the four states we reviewed. 

40 See AARP Public Policy Institute, Safe at Home? 

41 Pub. L. No. 111-148. tit VI, subtlt C, § 6201.124 Stat 119.721. 

Pago19 GAO-13-110 Eldor Financial ExploltaUon 
91 

State and Federal Officials 

Called for Greater Focus 

on Public Awareness 

personal care service providers. As of November 2012, 19 states were 

participating. The results of this program could provide data on the 

effectiveness of background checks in preventing elder abuse, including 

elder financial exploitation. 42 

State and local authorities in the four states we visited told us current 

safeguards are not. always sufficient to prevent exploitation by those older 

aduHs depend on for assistance. Although states are generally 

responsible for laws and regulations regarding these issues, the OAA 

directs the federal government to disseminate information about best 

practices to prevent elder abuse, including elder financial exploitation. 

According to our analysis, there is a role for the federal government to 

provide more information and guidance to prevent these types of elder 

financial exploitation. 

Experts and federal, state, and local officials told us that older adults need 

more information about what constitutes elder financial exploitation in 

order to know how to avoid it. 43 However, APS and law enforcement 

officials told us that it is difficult for them to reach many older adults with 

this message and that they have little funding to promote public 

awareness. For example, in one California county officials reported that 

due to budget cuts, they had lost many positions that involved educating 

the public about elder financial exploitation. 

Each of the seven federal agencies we reviewed independently produces 

and disseminates public information on elder financial exploitation that is 

tailored to its own mission. For example, SEC produces information to 

educate investors about fraud prevention, including an investment guide 

for older adults. FTC publishes information to protect consumers, and 

AoA disseminates information to help reduce elder abuse, including elder 

financial exploitation. (See table 2 for examples of the types of 

information provided by each of these agencies.) These seven agencies 

42 In addition to criminal background checks, APS agencies in several states maintain a 

registry of elder abuse offenders that can be used to flag in-home caregivers who might 

financially exploit older adults. 

43 See appendix X for examples of activities undertaken by APS, criminal justice, and 

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

educate and inform older adults about elder financial exploitation. See appendix XI for examples of these activities undertaken by private organizations, 

Page 20 GAO·13-110 Elder Financial Exploitation 
92 

have also worked together at times to increase public awareness of elder 

financial exploitation. For example, each year FTC and the Postal 

Inspection Service collaborate on community presentations during 

National Consumer Protection Week. 

Table 2: Selecled Public Awarene .. Efforts of Federal Agencies Related to Elder Financial Exploitation 

Agency 

CFPB 

FTC 

AoA 

Justice 

SEC 

FinCEN 

Postal Inspection 

Service 

Public Awarene •• Efforts 

Office for Older Americans provides infaonation for the public on its website about how to avoid being 

exploiled. 

Published a guide for consumers about reverse mortgages. 

Produces publications, pamphlets, and videos on a range of consumer protection issues, such as 

telemarketing fraud, and distributes them via its website, the media, and partnering organizations, 

Piloted a partnership with the AARP Foundation that funds peer counseling for older adults or their relatives 

who think they have been victimized. 

Worns with AoA's Senior Medicare Patrols to distribute educational materials to older adults and collect 

complaints. 

Distributes an e--newsletter discussing elder abuse, including financial exploitation. 

Maintains Senior Legal Helplines, 

Provides elder abuse prevention grants, 

Collaborates with nonprofit Women's Center for a Secure Retirement to provide a gateway for financial 

infonnation for women. 

Provides grants to states, localities, and nonprofits for elder abuse prevention activities, induding education 

and pu~lic awareness campaigns. 

Provides information through its public websites on how individuals can protect themselves from and report 

various types of financial fraud. 

Distributes investor information that may relate to elder financial exploitation via its website, hotline, 

pamphlets, and regional events. 

Provides an investment fraud guide for older adults. 

Produces investor alert bulletins. 

Woi1<s with AARP, FINRA, and state securities "'9ulatol1l on the Outsmarting Investment Fraud campaign. 

Provides the public with information via its website on scams and resources for victims of fraud or identity 

theft. 

Deployed FakeChecks.org Campaign in 2007 to target international fraud scheme. that are often directed 

toward older adults. 

In 2010, sent a postcard containing information about preventing fraud, including elder financial explOitation, 

to every U.S. household. 

Participated in AARP Town Hall meeting in 2011. 

Conducts ongoing fraud prevention messaging on its website. 

Makes community presentations on how to avoid scams during National Consumer Protection Week each 

March (with FTC). 

Source: GAO analysis of agency documents and interviews. 

Page 21 GAO-13·110 Elder FInancIal ExploltaUon 
93 

Difficulty Gaining 

Expertise, Sustaining 

Collaboration, and 

Obtaining Data 

Hinders States' 

Responses to Elder 

Financial Exploitation 

However, although the OAA calls for a coordinated federal elder justice 

system,44 which includes educating the public, the seven agencies we 

reviewed do not conduct these activities as part of a broader coordinated 

approach. In previous work, we found that agencies can use limited 

funding more efficiently by coordinating their activities and can strengthen 

their collaboration by establishing joint strategies.·5 Similar calls for 

coordination were raised when the EJCC held its first meeting on October 

11,2012, to begin implementing its mandate to coordinate federal elder 

justice activities and develop national priorities. As EJCC Chairman, the 

Secretary of HHS stated that combating elder abuse-which includes 

elder financial exploitation-is an "alf..of-governmenF effort and that 

federal programs are not organized in a strategic way, which decreases 

their effectiveness. One expert noted that there is a clear need for a 

strategic, multi-faceted public awareness campaign on elder abuse. An 

offiCial from the Financial Services Roundtable·· added that many 

agencies are trying to focus on awareness and education, but their efforts 

appear unorganized and uncoordinated. 

U.S.C. § 3011(e)(2). 

45 See GAO, Results-Oriented Government Practices that Can Help Enhance and 

Sustain Collaboration Among Federal Agencies, GA0-06-15, (Washington, D.C.: October 21,2005) . 

• 6 The Financial Services Roundtable is an advocacy group with members from the 

banking, securities, investment, and insurance sectors. t1 aims to protect and promote the 

economic vitality and integrity of its members and the U.S. financial system. 

Page 22 GAOM13-110 Elder Financial Exploitation 
94 

Special Knowledge and 

Skills Are Needed to 

Respond to Elder Financial 

Exploitation 

According to state and local officials we spoke with in four states, 

effectively investigating and prosecuting elder financial exploitation 

requires special skills and knowledge, which APS workers, law 

enforcement officers, and district attorneys sometimes lack. For example, 

APS officials noted that some case workers have little background or 

training in investigating financial crimes, and would find it difficult to 

respond to these cases. Local law enforcement officials also noted that 

they receive little training on elder financial exploitation and need 

additional training to build expertise. In addition, we were told that some 

prosecutors and judges are reluctant to take on cases of suspected elder 

financial exploitation because of competing priorities and limited 

resources, a continuing belief that elder financial exploitation is primarily a 

civil issue, or a view of older adult victims as unreliable witnesses. 

State and local officials in the four states we reviewed are attempting to 

increase their expertise. 47 For example, some state and local officials told 

us they attempt to acquire investigative expertise through formal and onthe-job training, by dedicating units or staff to investigate suspected cases 

of elder financial exploitation, or by contracting for assistance from 

certified fraud examiners or other forensic accountants. 4

' However, state 

and local officials also told us that funding constraints limited their ability 

to build this additional expertise. Moreover, offiCials and experts told us 

that in order to more effectively allocate their limited resources, state and 

local entities would need more information about which practices have 

proven to be most effective for investigating, as well as preventing, elder 

financial exploitation. 

AoA and Justice have developed some resources that could be used to 

help state and local agencies build expertise in identifying, investigating, 

and prosecuting elder finanCial exploitation (see table 3). 

47 See appendix X for examples of activities undertaken by APS, crtminal justice, and 

consumer protection agencies in CaHfornia, Illinois, New York, and Pennsylvania to build 

additional expertise. See appendix XI for examples of these activities undertaken by 

private organizations. 

48 Forensic accountants specialize in investigating financial crimes. The Certified Fraud 

Examiner credential is one professional designation that a forensic accountant may hold. 

Page 23 GAO·1:J..110 Elder Financial exploitation 
95 

Table 3: Examples of AoA and Justice Resources That Could Be Used to Increase Stata and Local expertise about Elder 

Financial Exploitation 

Agency 

AoA 

Justice 

Resource 

Nationa! Center on Elder Abuse website has materials on elder abuse, including elder financial exploitation, 

AoA makes formula grants to states and territories under ntle VII of the Older Americans Act that are used to fund training.a 

National Adult Protective Services Resource Center provides information and technical assistance aimed at APS 

professionals. 

National Legal Resource Center provides training and infonnation on legal issues affecting older adults. 

Model Approaches to Statewide Legal Assistance Systems demonstration program includes two elder abuse projects 

that focus on elder financial exploitation. 

Funding the development of APS elder abuse training modules. 

Justice's Office on Violence Against Women. Office for Victims of Crime, and Bureau of Justice Assistance fund a 

number of trainings-including some material devoted to elder financial exploitation-to law enforcement and others in 

the field each year. 

Prosecutors in the Criminal Division's Fraud Section have provided training at national conferences on elder fraud. 

Created an elder financial exploitation guide for police officers, 

Plans to fund the development of online training for legal aid attorneys on identifying and responding to elder abuse, 

including financial exploitation. 

Developing strategies and best practices for financial fraud and identity theft investigations. 

Source: GAO 8flalysis of HHS and Justice materials and int8I"MWS 

'42 U.S.C. §§ 3058b and 30581. 

Under the EJA, HHS is authorized to develop and disseminate best 

practices and provide training for APS workers,49 and AoA-supported 

resource centers compile information about elder abuse in general for 

easy access, However, information pertaining specifically to elder 

finanCial exploitation topics-such as mass marketing fraud, power of 

attorney abuse, or investment fraud-may be dated or more difficult to 

find because it is intermingled with other materials. 50 For example, AoA's 

National Center on Elder Abuse (NCEA) has compiled a list of elder 

abuse training materials from a variety of sources, but we could find no 

quick and clear way to identify which trainings cover financial exploitation. 

Additionally, Justice officials told us that H would be beneficial for more 

training to be available to prosecutors of elder abuse. Justice has 

identified providing training and resources to combat elder abuse as a 

49 § 2042(a)(1)(C), 124 Stat 794, 1397m-1(a)(1)(C). 

50 See appendix XIII for more information on AoA resource centers. 

Page 24 GAO.13-110 Elder Financial Exploitation 
96 

States Identified 

Additional Federal Support 

Needed to Sustain Crucial 

Collaborations across 

Systems and Levels of 

Government 

Collaboration between APS 

and Criminal Justice Systems 

strategy to achieve its objective of preventing and intervening in crimes 

against vulnerable populations. Justice officials indicated that they are 

developing an elder justice prosecution website that could serve as a 

resource and help build expertise. The website is expected to consolidate 

training materials in use across the country, primary litigation materials 

from local district attorneys, and information from relevant academic 

centers, such as the University of Califomia at Irvine and Stanford 

University. However, it is unclear when this project will be completed, as 

Justice officials are waiting for materials from local district attorneys. As a 

result, prosecutors and other law enforcement officials currently do not 

have access to these materials. 

The OM requires AoA to develop a plan for promoting collaborative 

efforts to support elder justice programs at all levels. 51 Officials we met 

from state and local social service and criminal justice agencies in three 

of the four states we reviewed said that while collaboration between their 

systems is important for combating elder financial explOitation, 

collaborating can sometimes be difficult because the two systems differ in 

the way they respond to exploitation and carry out their work. Specifically, 

APS focuses on protecting and supporting the victim, and criminal justice 

focuses on prosecuting and convicting exploiters. However, according to 

experts, by working together, APS, the criminal justice system, and other 

partners can more easily accomplish both of these goals. 52 Experts have 

noted that some type of multidisciplinary response to elder abuseincluding elder financial exploitation-is prudent because of the complex 

51 42 U.S.C. § 3011(e)(2)(o)(ix). 

52 See Adria E. Navarro et al., "Holding Abusers Accountable: An Elder Abuse Forensic 

Center Increases Criminal Prosecution of Financial Exploitation" (funded by Justice). The 

Gerontologist, vol. 0, (May 15, 2012). This study was funded by Justice. 

Page 25 GAO·13·110 Elder Financial Expl_Uon 
97 

nature of the problems faced by victims and the wide variety of responses 

required to help them and to prosecute exploiters. 

In each of the four states we reviewed, local initiatives helped bridge the 

gap between APS and criminal justice agencies. 53 In some locations APS, 

criminal justice agencies, and other public and private entities have 

formed groups that meet periodically to develop awareness activities, 

foster information sharing, and discuss and resolve individual cases. 

Some multidisciplinary groups discuss elder abuse broadly, such as elder 

abuse task forces in some Pennsylvania counties and multidisciplinary 

groups in New York City. Others concentrate on financial exploitation 

specifically, such as the Philadelphia Financial Exploitation Task Force, 

and Financial Abuse SpeCialist Teams in some California counties. 

Although multidisciplinary groups responding to elder financial 

exploitation already exist in each of the four states we visited and 

elsewhere, forming and sustaining these groups continues to be 

challenging, according to law enforcement officials in one state we visited 

and experts. Busy schedules and competing priorities make it difficult for 

some partiCipants to attend meetings regularly, and a group's focus 

influences how extensively members are willing to participate. For 

example, in one location officials told us that when the primary focus of 

their group shifted from prosecuting cases to providing services, 

partiCipation by law enforcement officials declined. Collaborative efforts 

can also be undermined by a history of poor interaction between member 

organizations, differences in systemic understanding of elder financial 

exploitation, difficulties communicating across disciplines, different 

understandings of limits on information sharing, unclear roles, and failure 

to address the group's long-term survival. 54 However, information on 

relevant promising practices in this area could help promote creation of 

such groups-particularly when resources are limited-and ensure their 

success. 

53 See appendix X for examples of activities undertaken by APS, climinal justice, and 

consumer protection agencies in California. Illinois, New York, and Pennsylvania to 

support collaboration. See appendix XI for examples of these activities undertaken by 

private organizations, 

54 Brandl et aI., Elder Abuse Detection and IntelVention (New York: 2007). 

Page 26 GAO-13--110 Elder Financial Exploitation 
98 

Federal agencies have made some efforts to promote and inform 

collaboration between the APS and criminal justice systems in states. 

However, agencies have taken few steps to compile or disseminate 

promising practices in creating or sustaining multidisciplinary groups 

responding to elder financial exploitation, even though the OAA requires 

AoA to develop and disseminate information on best practices for adult 

protective services. AoA and Justice have offered a small number of 

grants to states to combat elder abuse or other crimes that require or 

encourage collaborative efforts such as multidisciplinary teams (see 

Table 4). 

Table 4: Example. of Federal Grants That Encourage Collaboration among Slats Agoncl •• That R .. pond to Elder Abu •• 

Agency 

AoA 

Justice (Office on Violence 

Against Women) 

Grant 

Elder Abuse Prevention Interventions Program: Requires grantees to have a partnership that includes 

at least the APS and criminal justice systems. AoA expacted to award between $625.000 and $1.02 

million each to 5-8 grantees in 2012. 

Elder Justice Community Collaborations: Relatively small ($10.000) grants specifically for setting up 

elder justice coalitions were awarded to over 40 grantees from 2007 to 2010. 

Prevention of Elder Abuse, Neglact and Explollation (OM Title VII-A3), fonmula grants to ali states 

and territories that broadly require collaboration between SOCia! services and criminal justice systems. 

Attorneys funded by Title 1116 of the Older Americans Act may wor!< wIIh APS in various situations. 

including situations dealing with guardianship issues. 

Funding from AoA's Model Approaches to Statewide Legal Assistance Systems demonstration grants 

may be used to support projects that address financial fraud in a collaborative fashion. 

Enhanced Training and Services to End Violence Against and Abuse of Women Later in Life Program: 

Requires a partnership of criminal justice agencies, prosecutors, and nonprofits. 

AoA's Elder Justice Community Collaborations program offered over 40 

$10,000 grants, along with technical assistance and training, from 2007 to 

2010 for the purpose of setting up elder justice coalitions. These 

coalitions, which included members across a broad range of disciplines, 

were required to create an elder justice strategiC plan for their community, 

including plans for continuation beyond the grant period. This program 

was the only one we identified that was created specifically for the 

purpose of setting up new coalitions: other grants either allowed funds to 

be used for that purpose or required a coalition to be in place to 

implement the grant-funded initiative. 

Collaboration on International 

and Interstate Financial Crimes 

Interstate or international mass marketing scams include "grandparent 

scams," which persuade victims to wire money to bail "grandchildren" out 

of jail or pay their expenses, and foreign lottery scams that require victims 

Page 27 GAO·13 .. 110 Eldor Flnanclal Exploitation 
99 

to pay sizeable sums before they can receive their winnings. 55 In 2011, 

the FBI's Internet Crime Complaint Center5S received over 300,000 

complaints from victims of all ages about online fraud alone, with reported 

losses of about $485 million. 

Internallonal Mas. Marketing Scam 

From 2005 to 2009, about 100 older adults wired or mailed millions of dollara to scam 

artists working out of ~boiler rooms n in a Middle Eastern country, in response to a 

phone call from 'an attorney" claiming they had won a lottery or sweepstakes but had 

to firat pay several thousand dollara in 'taxes' or 'fees' to recaive their winnings. The 

perpetrators used information individuals had provided on sweepstakes entry fonns to 

target older adults with some savings or assets, in particular. Many of the victims, who 

ranged in age from 70 to 80, suffered from debilitating conditions including Alzheimer's 

or some other form of dementia. Once'the perpetrators received a payment, they recontacted victims to inform them that they needed to send more. Victims typically did 

as they were told, continuing to send tens and even hundreds of thousands of dollara. 

To lend legitimacy to this elaborate scheme, victims were sent fake documents that 

appeared to come from the U.S. Interna! Revenue Service or another government 

agency, and received calls from perpetrators impersonating public offiCials. In addition 

to losing their life savings, victims of this scam suffered emotional distress and 

declining health. The FBI was the lead U.S. investigating agency in this case. Six 

suspects pled guilty to conspiracy charges filed by the U.S. Attorney's Office involving 

wire and mail fraud through telemarketing. Several were sentenced to between 40 and 

150 months in prison. Four more have been extradited to the United States and are 

Local law enforcement authorities in the four states we visited indicated 

that investigating and prosecuting the growing number of cases involving 

interstate and internattonal mass marketing fraud, which often target older 

adults, is particularly difficult for them. For example, coordinating with law 

enforcement authorHies in other jurisdictions is labor intensive,57 so state 

55 Mass~market!ng fraud refers generally to any type of fraud scheme that uses one or 

more mass communication techniques and technologies-such as the Internet, 

telephones, the mail, and even mass meetings in person-to contact, solicit. and obtain 

funds or other items of value from multiple victims in one or more jurisdictions, See 

appendix XIV for an example of a letter promoting a sweepstakes scam . 

.. The Internet Crime Complaint Center is an online system that collects complaints of 

suspected criminal or civillntemet-related violations and develops referrals to law 

enforcement and regulatory agencies at the federal. state, local, tribal. and international 

levels. It is a partnership between the FBI and the National White Collar Crime Center, a 

nonprofit that supports the investigation and prosecution of economic and high-tech crime. 

57 According to the Fraud Section of Justice's Criminal Division, lottery scam perpetratora 

are operating from a growing number of countries, including Costa Rica, the Dominican 

Republic, Jamaica. the Netherlands. Nigeria, and Spain. 

Page2S GAO-13-110 Elder Financial Exploitation 
100 

and local officials are often unable to pursue these cases themselves. 

Furthermore, even though various federal agencies have the authority to 

investigate and prosecute interstate and international scams (see fig. 3)," 

local law enforcement officials told us there is not enough information 

available on whom they should contact when they need to refer a case to 

the federal level. They indicated that the lines of communication between 

local and federal agencies tend to be informal, based on whom local law 

enforcement officers know in a federal agency. Providing accurate 

contact information is consistent with Justice's strategic objective for fiscal 

years 2012-2016 to strengthen its relationships with state and local law 

enforcement. Justice officials told us they believe that local officials know 

which federal officials to contact about international and interstate cases, 

but state and local law enforcement officials told us that it would be 

helpful to have more specific information. Cases that local officials do not 

refer to a federal agency due to a lack of correct contact information may 

not be investigated or prosecuted by either federal or local authorRies. 

58 In addition to the work of individual agencies, the Financial Fraud Enforcement Task 

Fore&-a broad coalition of more than 20 federal agencies, 94 U.S. Attorneys' Offices, 

and state and local partners-was created by executive order to (1) investigate and 

prosecute significant financial crimes and other violations related to the current financial 

crisis and economic recovery efforts, (2) recover the proceeds of such crtmes and 

violations, and (3) ensure just and effective punishment of those who perpetrate such crimes and violations. Exec. Order No. 13,519,74 Fed. Reg. 60,123 (Nov. 19,2009). The 

Consumer Protection Worning Group formed under the Task Force in earty 2012 focuses 

on strengthening the govemment's collective efforts to address consumer-related scams 

targeting vulnerable populations, 

Page 29 GAO*1~110 Elder Financial exploitation 
101 

~ U.$ Attofneys also participate m the inves!lgatlon of cases, either alone or in cooperation with othe! 

In addition to not whom to contact, state and local law 

enforcement officials in four states we reviewed lold 

concerned that federal agencies do not take of the cases are 

referred to them. For example, a law official from California 

described a case of widespread interstate check fraud, eXlorelssina 

frustration with federal that would not any 

~~oo~l ~~~ 

cannot take all cases referred to them state and local law enforcement 

and that they must their to make the best use of their 

limited resources. and FTC officials said they tend to focus on 

larger cases in which many victims were affected or a significant amount 

Page 30 GAO~13"110 E!der F!nant::ia! Exploitation 
102 

Working Cooperatively with 

Banks 

of money was lost, and Justice's U.S. Attorneys also apply regional 

priorities, such as the vulnerability (including age) of the victim, when 

determining which cases to take. 

Even if federal agencies choose not to take a case a state or local agency 

refers to them, officials told us that consistent referrals of cases by state 

and local authorHies allow them to identify patterns or combine several 

complaints against the same individual into one case. FTC's Consumer 

Sentinel Network database (Consumer Sentinel) collects consumer 

complaint data and aims to be an information-sharing tool to enable state 

and local law enforcement to become more effective. 59 Justice officials 

said they encourage individuals and state and local authorities to file a 

complaint of suspected fraud to eHher the Consumer Sentinel or the FBI's 

Internet Crime Complaint Center. However, while some state Attorneys 

General were familiar with the FTC database, local law enforcement 

officials we spoke with did not say that they reported cases to H or used 

its data. One official said he did not find the Consumer Sentinel database 

useful because law enforcement officials are not familiar with it. 

FTC officials explained that while they have made attempts to get statelevel offices to contribute to the Consumer Sentinel, barriers such as 

reservations about data sharing, obsolete technological infrastructure, 

and severe budgetary cutbacks have kept the numbers of contributors 

low. When state officials do not contribute to the Consumer Sentinel, the 

information in the database does not give a national picture of the extent 

of cross-border scams. As a result of this-in addition to the impact of 

some law enforcement officials not using the system-it may be more 

difficult to combat these scams, and officials at all levels may not have the 

information they need to target their resources appropriately. 

According to state and local officials, banks are important partners in 

combating elder financial exploitation because they are well-posHioned to 

recognize, report, and provide evidence in these cases. Indeed, frontline 

bank staff are able to observe elder financial exploitation firsthand. For 

59 FTC's Consumer Sentinel Network is an online database that houses millions of 

consumer complaints available to law enforcement. Sentinel's roster of 28 current data 

contributors includes 12 state attorneys general, the FBI's Internet Crime Complaint 

Center, and the Council of Bettar Business Bureaus. More than 2,600 users from over 

2,000 law enforcement agencies worldwide use the system to share information, 

prosecute cases, conduct investigations, and pursue leads. 

Page 31 GAO·13-110 Elder FInancial Exploitation 
103 

example, a bank teller who sees an older adult regularly is likely to notice 

if that individual is accompanied by someone new and seems pressured 

to withdraw money or if the older adult suddenly begins to wire large 

sums of money internationally. 

There are state efforts and bank policies to help bank employees 

recognize exPloitation. In Illinois, all state-chartered banks are required to 

train their employees on what constitutes elder financial exPloitation. 60 

State and local agencies in California and Pennsylvania provide 

information and training to banks to help them recognize elder financial 

exploitation. Most of the six banks we spoke with had a policy for 

periodically training employees on identifying elder financial exPloitation. 

In addition, these banks had a system in place that routinely monitors 

bank transactions for unusual activity and can help identify exploitation. 

Banks may also help report suspected elder financial exploitation to local 

authorities. Training initiatives, such as Illinois' program, encourage bank 

employees to report exploitation. Most of the six banks we spoke with had 

procedures in place for frontline employees to report suspected elder 

financial exploitation to bank management. Some of these banks also had 

internal units that are dedicated to receiving staff reports of elder financial 

exploitation and referring them to the proper authorities. 

Notwithstanding such efforts, APS and criminal justice officials told us 

elder financial exploitation is generally underreported by banks.61 Despite 

the training they receive, bank staff may not be aware of the signs of 

elder financial exploitation or know how to report it. In addition, in five of 

the six prosecuted cases we reviewed in depth, there were missed 

opportunities for banks to raise questions about transactions. For 

example, in one case, bank officials did not take any action in response to 

repeated withdrawals of large amounts of money that were not typical for 

60 The Illinois Department on Aging designed and administered the training protocol and 

the Illinois Department of Financial and Professional Regulation certifies compliance with the training requirement. 

61 Most states require some classes of professionals or organizations to report suspected 

elder abuse, which may include financial exploitation of older individuals, to state 

authorities. Some states, including California-a state we contacted-specifically include 

banks as mandatory reporters. Cal. Welf. & Inst. Code § 15630.1 (2012). Some states 

immunize individuals who make such reports in good faith from civil and/or criminal liability 

under state law. 

Page 32 GAO .. 13-110 Elder Financial Exploitation 
104 

that customer. Bank officials said they do report suspected elder financial 

exploitation, but also emphasized that banks are not law enforcement 

agencies. Officials said their primary responsibility is to protect customer 

assets and privacy and ensure customers have access to their funds. In 

addition, a banking association representative told us that even though 

federal privacy laws do not prohibit banks from reporting suspected 

abuse, banks are concerned that they will be held liable if they report 

suspected exploitation that is not later substantiated. 

Three federal agencies-CFPB, AoA, and FinCEN-are positioned to 

encourage banks to identify and report elder financial exploitation, either 

due to the agency's mission or via proposed or existing activities. The 

CFPB is the primary federal consumer protection regulator with respect to 

a variety of financial institutions, including banks. The Dodd-Frank Act 

authorizes the CFPB to protect consumers, including older adults, from 

abusive practices committed in connection with the offering or provision of 

consumer financial products or services.62 In a November 2011 

congressional testimony, the Assistant Director of CFPB's Office for Older 

Americans said the agency has a unique opportunity to help enhance, 

coordinate, and promote efforts of a variety of groups, including financial 

services providers. 63 

While the federal government generally requires banks to train employees 

on a variety of issues, such as money laundering, physical bank security, 

and information security," we could find no similar requirements for 

banks to train employees to recognize and report elder finanCial 

exploitation. However, AoA is considering collaborating with one large 

national bank on a project to encourage bank training on elder financial 

exploitation. 

Banks are also required to file Suspicious Activity Reports (SAR) with 

FinCEN to alert them of potentially illegal bank transactions that involve, 

individually or in the aggregate, at least $5,000, which could include elder 

62 § 1031, 124 Stat. 1979-80 (12 U.S.C. § 5531). 

63 Testimony before the Subcommittee on Financial Institutions and Consumer Protection 

United States Senate Committee on Banking, Housing, and Urban Affairs (Washington, 

D.C., November 15, 2011) . 

.. 31 U.S.C. § 5318(h)(l}(C}, 12 C.F.R. § 21.3(a}(3}, and pt. 30, app. B (2012). 

Page 33 GAO-13-110 Elder Financial Explottatlon 
105 

financial exploitation.65 In February 2011, FinCEN issued an advisory to 

banks that described elder financial exploitation, provided potential 

indicators of elder financial exploitation, and requested the use of a 

specific term ("elder financial exploitation") when applicable in SAR 

narratives related to this activity." 

Bank records can help investigators track an older adult's use of funds 

over time and detect irregularities. APS officials in Pennsylvania told us 

that although Pennsylvania state law grants APS access to bank records, 

they are often denied access on the basis of federal privacy laws or the 

bank's policies. APS officials from California, Illinois, and New York also 

reported that they are denied access to bank records for the same 

reasons. 67 As a resun, investigators are unable to obtain the information 

necessary to investigate suspected exploitation, identify perpetrators, 

stop further exploitation from occurring, or obtain restitution for victims. 

Bank officials told us the federal government could help clarify bank roles 

and responsibilities related to privacy and financial exploitation of older 

adults.68 

There are two federal laws that generally protect the privacy of consumer 

banking records: the Right to Financial Privacy Act of 1978 (RFPA)69 and 

65 31 C.F.R. § 1020.320(a) (2012). If a financial institution knows, suspeds, or has reason 

to suspect, for example. that transactions have no business or apparent lawful purpose or 

are not the sort in which a particular customer would normally be expected to engage, and 

the financial institution knows of no reasonable explanation for the transaction after 

examining the available facts, including the background and possible purpose of the 

transaction, the financial institution must file a SAR. 

66 FinCEN stores SARs in a database and each state has a law enforcement point-ofcontact with access to the database. Local police and district attorneys rely on their state's 

FinCEN point-of-contact to obtain SAR infonnation. While SARs could contain leads on elder financial exploitation cases, local officials we spoke with said they did not use SARs 

often to build criminal cases and SARs are not a vehicle for fast action, 

67 Local criminal justice agencies said that they are able to obtain bank records with a 

subpoena or search warrant, but banks sometimes take a long time to provide the 

records. This, in tum, extends already time-intensive investigations. 

68 The American Sar Association completed a report on this issue and concluded that 

federal plivacy laws do not prohibit banks from shaling infonnaticn in suspected cases of 

elder financial exploitation. American Sar Association, Can Bank Tellers Tell? Legal 

Issues Relating to Banks Reporting Financial Abuse of the Elderly (2003). 

69 Pub. L. No. 95-630, tit. XI, 92 Stat. 3641, 3697-3710 (codified as amended at 12 U.S.C. 

§§ 3401-3422). 

Page 34 GA()..13-110 Elder Financial exploitation 
106 

Incomplete Data Hinder 

Efforts to Combat Elder 

Financial Exploitation 

the Gramm-Leach-Bliley Act. 70 Each establishes standards that banks 

must meet to safeguard customer banking information. The RFPA 

generally prohibits financial institutions, including banks, from providing 

any federal governmental authority with access to copies of information in 

any customer's records without first providing notice to the customer. 

Because a government authority is defined in RFPA to include only 

federal agencies and officials, however, it should not prevent banks from 

reporting possible financial exploitation of older adults-or providing bank 

records to-state APS. 

The Gramm-Leach-Bliley Act generally prohibits financial institutions, 

including banks, from disclosing nonpublic personal information to third 

parties including, but not limited to, federal governmental authorities. 

Nonetheless, the act has a number of general exceptions permitting 

disclosure, such as: to protect against or prevent actual or potential fraud, 

unauthorized transactions, claims, or other liability; consistent with the 

RFPA, for an investigation on a matter related to public safety; or to 

comply with a properly authorized civil, criminal, or regulatory 

investigation, subpoena, or summons by federal, state, or local 

authorities. 

The NCEA and experts have called for more data on the cost of elder 

financial exploitation to public programs and for trend data on its extent. 

According to our analysis, these data could help determine what 

government resources to allocate and how best to prevent and respond to 

this problem. According to one Utah official, quantifying the impact of 

elder financial exploitation in that state helped that state's legislators 

understand the importance of combating this problem and convinced 

them to simply decrease, rather than eliminate, state APS funding 

altogether. 71 However, according to our analysis, no other state has 

undertaken such a study. 

Similarly, data on the extent of elder financial exploitation over time could 

help state and local APS, as well as law enforcement agencies, assess 

70 PUb. L. No. 106-102, §§ 501-510,113 Stat. 1338, 1436-1445 (codified as amended at 

15 U.S.C. §§ 6801-6809). 

71 See Gunther, "The 2010 Utah Cost of Financial Exploitation.' 

Page 35 GAO~13·110 Elder Financial Exploitation 
107 

the effectiveness of their efforts to combat it. The OAA 72 and EJA both 

require the federal government to take steps to collect and disseminate 

data on all types of elder abuse," yet the studies federal agencies have 

funded in this area have produced little data on its extent over time, as we 

previously reported,74 or on its cost. 

Several federal agencies do collect administrative data on the number of 

complaints submitted by consumers or criminal cases that sometimes 

involve elder financial exploitation (see table 5)-data that could help 

state and local APS and law enforcement authorities determine what 

resources to allocate and how best to prevent and respond to this 

problem. Each agency publishes material containing a range of 

administrative data from its system that is available to the public. FTC, for 

example, publishes statistics from the Consumer Sentinel on the number 

and types of complaints, amount of losses, and characteristics of 

victims." 

Table 5: Federal Administrative Data Systems That Collect Incidents of Elder Financial Exploitation 

Data SystemlAgency 

FTC's Consumer 

Sentlne' Network 

FlnCEN's SAR Data 

FBI's Internet Crime 

Complaint Center 

Justice'. National 

Incident-Based 

Reporting System 

Information Collected Identifies Age of Victim? Contributors 

Information on consumer complaints, Optional. Less than half of Some state and local law 

including investment and mass marketing complaints currently include enforcement agencies, federal 

fraud, and identity theft. The FTC adds cases age. agencies, nongovemmental from the FBI's Intemet Crime Complaint and private entities, and 

Center to the Consumer Sentinel. individuals, 

Information on suspicious financial Option to identify suspected Banks and other financial 

transactions, both actual and attempted. elder financial exploitationa institutions. 

and age of victim. 

Complaints about cyber-crime, including Age is a required field. State and local law 

online fraud. enforcement agenCies, as well 

as individuals, 

Each single inCident of and arrest for 46 Age is a required field for State and local law 

crimes collected from state, local, and federal individual victims. enforcement agencies, 

law enforcement agencies that participate in 

the system. 

7242 U.S.C. § 3012(e)(2)(A)(iii) and (iv), and (16). 

7' § 2042(a)(1)(B), 124 Stat. 794 (codified at 42 U.S.C. 1397m-1(a)(1)(B)). 

74 See GAO-11-20B. 

75 FTC (2012) Consumer Sentinel Network Data Book for January - December 2011. 

Page 36 GAO-13-110 Elder Financial ExploitaUon 
108 

Data System/Agency InfonnaUon Collected Identille. Age of VlcUm? Contributors 

SEC'. Tips. Complaints about investments or financial Infonnation about age is All sources, including individual 

Complaints, and professionals. 

Referral. Portal 

not required. investors, 

Source: GAO analysis of doo.Im&nta ~ andlnteM8ws granted by FTC, FlflCEN, Justice, and sec. 

lin 2012, FlnCEN released a revised SAR that Indudes a check box that enables filers to indicate 

clearly that they are reporting suspected elder financial exploitation. The revised SAR is currentfy 

available for use, and 'Nil! become mandatory at the end of March 2013, according to FinCEN 

officials. 

While the number of reported incidents of elder financial exploitation in 

each agency's system represents only a portion of all cases that actually 

occur in a given period and geographic area, the number over time could 

provide an indication of fluctuations in the extent of certain types of elder 

financial exploitation. 

Data from the Consumer Sentinel could be of particular interest to state 

and local APS and law enforcement authorities, because over half of the 

consumer complaints reported to this system involve financial exploitation 

through fraud. Individual complaints can be directly reported to the 

Consumer Sentinel by victims or others on their behalf. Cases reported to 

the FBI Internet Crime Complaint Center and non-governmental 

organizations, such as the Council of Better Business Bureaus, are also 

added to the complaints in the Consumer Sentinel. Currently, however, 

the Consumer Sentinel does not receive any of the complaints reported to 

any of the law enforcement or consumer protection agencies in 38 states. 

Moreover, less than half the complaints in the Consumer Sentinel contain 

the age of the victim because FTC does not require complaints to include 

this information or other indicators of whether the case involved elder 

financial exploitation. 76 FTC officials told us the agency does not require 

complaints to include the age of the victim because of concerns regarding 

privacy and the potential burden this might place on individual 

complainants. In contrast, SARs in the FinCEN system will soon all be 

clearly identified when a filing institution reports suspected elder financial 

exploitation. 

In 2011, we found that state-level APS data could provide useful 

information on the extent of elder abuse, including elder financial 

exploitation, over time. We recommended that AoA work with states to 

7. See appendix XV for additional information on the data in the Consumer Sentinel 

Network. 

Page 37 GAO~1a..110 Elder FinancIal exploitation 
109 

Conclusions 

develop a nationwide system to collect and compile these data.77 AoA 

officials told us they have initiated discussions with states about 

establishing such a system, but have been unable to develop a 

comprehensive plan for implementing one due to a lack of funding. 

Elder financial exploitation is a multi-faceted problem spanning social 

service, criminal justice and consumer protection systems of government. 

As a result, combating it is challenging and requires action on the part of 

not only many state and local agencies, but also multiple agencies at the 

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

to solve this problem in ways that are consistent with its own mission. 

However, the problem is large and growing. It calls for a more cohesive 

and deliberate approach governmentwlde that, at a minimum, identifies 

gaps in efforts nationwide, ensures that federal resources are effectively 

allocated, establishes federal agency responsibilities, and holds agencies 

accountable for meeting them. 

The EJCC has recognized that combating elder abuse, including elder 

financial exploitation, is an effort that requires federal agencies to work 

together. A clearly articulated national strategy is needed to coordinate 

and optimize such federal efforts to effectively prevent and respond to 

elder financial exploitation, and the EJCC can be the vehicle for defining 

and implementing this strategy. In the current economic climate, state and 

local APS and law enforcement agencies will find it increasingly difficult to 

cope with growing numbers of cases without a national strategy attuned 

to their need for information and guidance on preventing and responding 

to elder financial exploitation, as well as additional data on its extent and 

impact. 

In addition to working together to build a national strategy to combat elder 

financial exploitation, there are a number of ways individual federal 

agencies could better support state and local APS and law enforcement 

agencies. For example, Justice has identified providing training and 

resources to combat elder abuse as a strategy to achieve its objectives of 

preventing and intervening in crimes against vulnerable populations. 

Without easily accessible information and guidance tailored to the needs 

of prosecutors nationwide, they may continue, given limited resources, to 

77 See GAO-11-20S. 

Page 38 GA0-13-110 Elder Financial Exploitation 
110 

Recommendations for 

Executive Action 

make such cases a low priority. Similarly, many cases cross jurisdictions 

and could involve multiple victims or have perpetrators located in other 

countries. These cases may not be investigated or prosecuted unless 

state and local law enforcement have better information on the process 

for contacting the federal government regarding these cases or the ways 

in which the federal government could provide support. 

Without information to correct banks' misconceptions about the impact of 

federal privacy laws on their ability to release bank records, APS and law 

enforcement agencies will continue to find it difficult to obtain the 

information they need from banks to investigate suspected cases of elder 

financial exploitation. Moreover, without educating bank employees 

nationwide on how to identify and report suspected elder financial 

exploitation, many cases will continue to go unreported, uninvestigated, 

and unprosecuted. The CPFB is positioned to provide additional 

information to banks, as part of the agency's consumer protection 

regulatory function and dedication to protecting the financial health of 

older Americans. 

Finally, to fulfill its mission of protecting consumers against unfair, 

deceptive, or fraudulent practices, the FTC established the Consumer 

Sentinel Network database to enhance information-sharing and support 

law enforcement at all levels. The Consumer Sentinel could serve as a 

valuable source of data on the extent of some types of elder financial 

explOitation nationwide and as an important resource for law enforcement 

authorities as they identify, investigate, and prosecute cases. The 

Consumer Sentinel's usefulness in this area, however, will continue to be 

limited until the number of contributors to it is increased and complaints 

are required to include the age of the victim or other indicators of whether 

the case involved elder financial explonation. In the absence of the latter, 

it is difficult to determine the number of financial exploitation complaints 

that involve older adults, which in turn makes any Consumer Sentinel 

data contributed less useful to state and local APS and law enforcement 

agencies. 

To coordinate and optimize federal efforts to prevent and respond to elder 

financial exploitation, we recommend the Secretary of HHS, as chairman 

of the Elder Justice Coordinating Council, direct the Council to develop a 

written national strategy for combating this problem. This strategy should 

include a clear statement of its purpose and goals and indicate the roles 

and responsibilities particular federal agencies should have in 

Page 39 GAO·13--110 Elder Financial Exploitation 
111 

implementing it. The strategy could address, among other things, the 

need to 

identify and disseminate promising practices and other information 

nationwide that can be used by state and local agencies to 

prevent exploitation, educate the public, and help state and local 

agencies collaborate, investigate, and prosecute elder financial 

exploitation; 

ensure coordination of public awareness activities across federal 

agencies; and 

collect and disseminate better data nationwide to inform federal, 

state, and local decisions regarding prevention of and response to 

elder financial exploitation. 

To develop expertise among prosecutors and other criminal justice 

officials, we recommend the Attorney General establish timeframes for 

and take the steps necessary to launch the elder justice prosecution 

website that Justice has begun to construct. 

To facilitate investigation and prosecution of interstate and international 

elder financial exploitation, we recommend the Attorney General conduct 

outreach to state and local law enforcement agencies to clarify the 

process for contacting the federal government regarding these cases and 

the ways in which the federal government could provide support. 

To encourage banks to identify and report suspected elder financial 

exploitation and to facilitate release of bank records to APS and law 

enforcement authorities for Investigating this activity, we recommend the 

Director of the Consumer Financial Protection Bureau 

develop a plan to educate banks nationwide on how to identify 

and report possible elder financial exploitation; and 

develop and disseminate information for banks on the 

circumstances under which they are permitted, under federal 

privacy laws, to release relevant bank records to law enforcement 

and APS agencies. 

To increase the usefulness of data from the Consumer Sentinel Network 

database for federal, state, and local investigation and prosecution of 

elder financial exploitation, we recommend the Chairman of the Federal 

Trade Commission: 

Page 40 GAOM13~110 Elder Financial exploitation 
112 

Response to Agency 

Comments 

take additional steps to encourage more state and local law 

enforcement authorities nationwide to report to the Consumer 

Sentinel relevant individual complaints they receive of elder 

financial exploitation and to encourage and enable these 

authorities to query the system; and 

study the feasibility of requiring that all complaints to the 

Consumer Sentinel include either the 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 for their comments. CFPB concurred with our recommendations 

and agreed that a collaborative and coordinated effort by federal agencies 

can help optimize strategies to combat elder financial exploitation (see 

appendix XVI). CFPB further noted that financial institutions can playa 

key role in preventing and detecting elder financial exploitation, and that 

CFPB is collecting information on finanCial institution training programs 

and considering how best to help institutions that request this information. 

HHS indicated in its general comments that our recommendations are 

consistent with what it heard during the inaugural meeting of the EJCC, 

and added that it looks forward to working with Congress to continue 

implementing the EJA (see appendix XVII). 

In an e-mailed response, FTC's Bureau of Consumer Protection noted 

that the Consumer Sentinel database provides law enforcement with 

access to millions of consumer complaints. FTC added that the database 

has no required fields, and expressed its belief that if consumers were 

required to provide detailed personal information as a condition to filing a 

complaint, they might refuse to do so, thereby decreasing the overall 

effectiveness of the system. FTC explained that almost 48 percent of all 

fraud complaints in 2011 included the voluntary submission of age, and 

that nearly half of its non-individual data contributors do not submit age 

information in the data they provide to FTC. Given the potential for the 

Consumer Sentinel database to support and enhance state and local law 

enforcement agencies' response to elder financial exploitation, 

particularly interstate and international cases, we continue to believe that 

FTC should study the feasibility of requiring that all complaints to the 

Consumer Sentinel database include the victim's age or another indicator 

of whether the complaint involves elder financial exploitation. In doing so, 

FTC can examine different options, including the use of a check box 

similar to the one that FinCEN has included in its SARs. 

Page 41 GAO·13·110 Elder Financial exploitation 
113 

We are sending copies of this report to the seven agencies we reviewed, 

relevant congressional committees, and other interested parties. We will 

also make copies available to others upon request. The report is available 

at no charge on GAO's website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-7215 or brownke@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix XVIII. 

Kay E. Brown, Director 

Education, Workforce, and Income Security Issues 

Page 42 GA()..13--110 Elder FInancial ExplottaUon 
114 

List of Requesters 

The Honorable Herb Kohl 

Chairman 

Special Committee on Aging 

United States Senate 

The Honorable Bernard Sanders 

Chairman 

Subcommittee on Primary Health and Aging 

Committee on Health, Education, Labor, and Pensions 

United States Senate 

The Honorable Richard Blumenthal 

United States Senate 

The Honorable Jeff Merkley 

United States Senate 

The Honorable Bill Nelson 

United States Senate 

The Honorable Sheldon Whitehouse 

United States Senate 

Page 43 GAO·13-110 Elder Financial Exploitation 
115 

MiSsion 

To llevelQj)a comprehensive, 

coordinaled, and cost.-effective' 

system of. home- and (lom.nunity, 

based, selVices that helps e!!ierly 

individuals maintain their health 

and i0depem:I"nce: 

How agency prioritizes 

miler flliancial ex loitlttion 

~ency's role in comMting 

eliler rmanciaI e loitation 

conduct rejillaroll on' and' 

develoj:l)nformation 00 best 

, practices fqrAdul!.Froteclive, 

~ervices{APS),,' , 

pr"yi(jll t;cbni~J,~s.siS!llnce to 

APS"al\d" 

eS~blilelice~lers tocon(luct 

research,\deveIQP exp,erti!'e, 

an~improye lawel1f9room",nt's 

"bOiIy: to, iJOrnbat elder 'financial 

e~plQlt!ltion ' 

li30ntact information 

cal.l:{.20Z),6~9':rl'j24 

Emall:"aQainfo®:a<>a,hh~,gov 

So~: GAO\$1atySl~ (}t MA doctlfrtlWlts"~TI<:Ilnt~<l.ws. 

fb3ugUf.-ffliffttlJM;i4lillii;1§Ui; 

Administration on Aging (HHS)1 

Relevant agenc divisions 

Assistant Secretary for Aging: Assists the Secretary with activities that 

address challenges and opportunities for older adults 

Office of Elder Rights: Administers the provisions of the Older 

Americans Act related to elder abuse prevention 

Selected activities 

Funds and oversees the National Center for Elder Abuse (NCEA; 

www,ncea,aoa,gov), a national resource center dedicated to 

preventing elder abuse 

Funded the National Adult Protective Services Resource Center, 

which provides information and technical assistance to APS officials 

Provides formula grants to State Units on Aging in each state to 

prevent elder abuse 

Provides funds to local legal services providers, which may use the 

funds to assist elder financial exploitation victims 

AoA's Model Approaches to Statewide Legal Assistance Systems 

program funds demonstration grants, which aim to strengthen states' 

legal services networks, may be used to support projects that address 

elder financial exploitation 

Coordination with other agencies 

Works with state aging agencies to help them develop statewide plans 

to combat elder abuse 

Through NCEA, partnered with Treasury on its Go Direct financial 

literacy campaign 

Partnered with Treasury and the Financial Services Roundtable on a 

toolkit for training financial institutions on elder financial exploitation 

Worked with the SEC on several Seniors Summits that brought 

agencies together to discuss elder financial exploitation 

Chairs the Elder Justice Coordinating Council, a collaborative body of 

federal agencies created under the EJA to recommend federal policies 

to combat elder abuse and ways federal agencies should coordinate to 

implement these pOlicies, 

Co-leads an informal interagency workgroup that helps facilitate 

federal elder justice activities, 

Pago44 GAO·13·110 Elder Financial Exploitation 
116 

Mission 

Mbd4IflRi,iWlliMIiIIUiWhAilt4M'4jflMriffli;i;;y;;; 

Consumer Financial Protection Bureau 

(CFPB) 

Organization 

Selected a(·tivities 

Posts information for older adults on website 

Conducts research on issues affecting older Americans, such as 

reverse mortgages, financial advisors and their credentials, and 

fiduciaries 

Gathering information from the public on elder financial exploitation to 

learn more about the ways in which older adults are financially 

exploited and best practices for elder financial management. CFPB 

expects to share its results in 2013. 

Coordination with other agencies 

Member of the Elder Justice Coordinating Council 

Member of Financial Fraud Enforcement Task Force, which brings 

numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

Works with AoA, Justice, Department of Labor, and SEC on various 

projects related to protecting older Americans 

Page 45 GAO·13~110 Elder Financial ExplOitation 
117 

1\lISsion 

Toprewnlbu$lne~'Practlces j~at are antlcol1lP!l:titive, deceptive, 9r 

unfalr.IQ conj3umers; IQ.l;nhance 

Infoimed 'COnsumer chQiCe ;,:inti 

pUbU".u(\.der:sl~ndrl1~,of*he 

com~eti~veproce$$: "11\1 tn 

acwmpHsnthlsy;llhout u'OduJy 

burc:l",Olllg leg1t1llisl" business 

aO!ivil)! • 

Clontact information 

tmi@iUtfjilWdtjffiIMtiiu,umM@u 

Federal Trade Commission 

Relevant a enc diVisions 

Bureau of Consumer Protection: Works to consumers against 

unfair, deceptive, Of fraudulent practices in The Bureau 

conducts sues companies and people violate the law, 

develops rules consumers, and educates consumers and 

businesses and The Bureau also 

collects and makes 

them country, 

The Division of Consumer and Business Education's mission is to 

consumers the tools they need to make informed decisions and to 

businesses the tools they need to comply with law. The Division 

and disseminates information that is timely, 

actionable, and in plain language. 

Selected actiVities 

The Enforcement Division, as part of its overall 

resources to aimed "oldest old" 

and their caretakers. In Division settled two administrative 

cases with companies that the services they provide 

when referring seniors to long-term care facilities. 

In April 2012, the Division of and Protection gathered 

information on the types of senior it happens, and 

possible solutions. 

mail 

Pf()s€,cutes fraudulent telemarketers, online and direct 

engaged in a wide variety of deceptive scams. 

Coordination with other a encies 

Member of Financial Fraud Enforcement Task Force, which 

numerous federal agencies together to prevent, investigate, 

prosecute financial crime 

work with international, federal, and local law enforcement 

to investigate cases and bring enforcel'l1ent actions against 

scammers 

Hosts Common Ground Conferences that 

agencies and non-profit organizations 

scams 

federal, state, local 

share information on 

Page 46 GAO·13·11(} Elrlerfioanclal Exploitation 
118 

iSbU3lhftlM4I!6in;;;.i4@4-iiifflilij;Q1l@.MM 

Financial Crimes Enforcement Network 

(FinCEN) 

Or anization 

Selected acthities 

Provides analytical support to law enforcement investigations and 

access to Suspicious Activity Reports collected from financial 

instrtutions under the Bank Secrecy Act of 1970 

Regulates financial institutions, requiring them to have anti-money 

laundering programs and to report suspicious activity, including elder 

financial eXploitation 

Issued advisory to financial institutions with information about how to 

identify and report elder financial exploitation 

Coordination with other agencies 

Member of Financial Fraud Enforcement Task Force, which brings 

numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

1114 (codified as amended al12 U.S.C. §§ 1S29(b), '!951-1'959: 31 

Page 47 OAQ,.13~110 Elder Financfa! exploitation 
119 

&SU@iiit\l?M·Uij¥iffiifidih#U4-

De~nllLrtjme,nt of Justice 

Selected activities 

Prosecutes perpetrators of elder financial exploitation 

Conducts public awareness activities on elder financJaJ exploitation 

Women and Office for Victims of Crime 

that includes elder financial exploitation 

Bureau of Justice Statistics and National Institute of Justice both fund 

or conduct studies on elder financial exploitation 

See FBI and U.S. Attorney pages for details on those agencies 

CoolCdination with othelC agencies 

Mandated member of Elder Justice Coordinating Council 

Member of Elder Justice Working Group 

Coordinates the Financial Fraud Enforcement Task Force, which 

brings numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

Page 48 GAO~13·110 Elder Financial Exploitation 
120 

t&'f4IMtiji@itmiJlN4U!illiHif§iH!1N4!'), 

Department of Justice 

Federal Bureau of Investigation (FBI) 

Organization 

56 field offices located in major metropolitan areas and in Puerto Rico, as 

well as legal attaches in U.S. embassies around the world 

Selected activities 

Responds to complaints from victims of crime 

Investigates selected cases of potential elder financial exploitation. 

Internet Crime Complaint Center receives complaints about internetrelated crime and shares them with the Federal Trade Commission 

(FTC) Consumer Sentinel Network database and federal, state, and 

local law enforcement offices as appropriate 

Conducts outreach about elder financial exploitation to local entities 

such as nursing homes and financial institutions 

Coordination with other agencies 

Works with local U.S. Attorneys' offices to make determinations about 

whether to open or continue investigations of potential elder financial 

exploitation cases 

Works with other federal and state agencies, such as the U.S. Postal 

Inspection Service, to conduct investigations 

May work jOintly with foreign law enforcement agencies to investigate 

international mass marketing fraud cases 

Coordinates with the National White Collar Crime Center to run the 

Internet Crime Complaint Center (see above) 

Maintains Memorandum of Understanding with the FTC to get access 

to FTC's Consumer Sentinel Network database 

Participates in regional task forces on financial crime 

Member of Financial Fraud Enforcement Task Force, which brings 

numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

Page 49 GAO·13·ffG Elder Financial Exploitation 
121 

~ency's role in combatllig 

elder f"mancial ex loitlttion 

rablt§lMM.M4W,U;!;i;;% 

Department of Justice 

U.S. Attorneys 

Organization 

94 offices across the country and in U,S, territories 

Selected activities 

Prosecutes perpetrators of elder financial exploitation 

Provides assistance to elder financial exploitation victims 

Coordination with other agencies 

May receive cases from other federal agencies, such as the FBI, the 

Postal Inspectors, and the SEC, as well as from state and local 

agencies 

May pursue cases in conjunction with partner agencies 

Participates in regional task forces on financial crime 

Member of the Financial Fraud Enforcement Task Force, which brings 

numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

Page 50 GAO~13~110 Elder Financial Exploitation 
122 

liU!i§IUJ8'''-MllMfflli@ll§4ififiij4Ui§ 

United States Postal Inspection Service 

Organization 

Sele('ted a('tivities 

2010 mass mailing to every U.S. household on fraud, including elder 

financial exploitation 

Community presentations about scams during National Consumer 

Protection Week 

Participates in community discussions about mail fraud, such as an 

MRP Town Hall meeting and a panel discussion hosted by Stanford 

Research Center on the Prevention of Financial Fraud 

Plans to have a campaign in 2013 on preventing fraudulent lottery 

schemes, focusing on older adults 

(;oordination with other agencies 

Member of the Elder Justice Coordinating Council 

Member of the Financial Fraud Enforcement Task Force, which brings 

numerous federal agencies together to prevent, investigate, and 

prosecute financial crime 

Collaborates with Canadian and Jamaican criminal justice systems on 

international fraud 

Collaborates with FTC on National Consumer Protection Week 

Page 51 GAO·13~11 0 EWer Financial Exploitation 
123 

iiU;!4!ildi§4i§41i;;4IQimuliiMf,ijhiY;;'\\!IiIli¥ilu 

Securities and Exchange Commission (SEC) 

Relevant agency dhisions 

Office of Investor Education and Advocacy: Carries out SEC's investor 

education program; responds to questions and complaints from members 

of the public; and reviews agency rule making from the perspective of the 

individual investor 

Division of Enforcement: Conducts investigations into possible violations 

of the federal securities laws, and prosecutes cases in civil suits in the 

federal courts, and in administrative proceedings before an administrative 

law judge 

Office of Compliance Inspections and Examinations: Administers the 

SEC's nationwide examination and inspection program and conducts 

inspections to foster compliance wrth securities laws and to detect 

violations of the laws 

Division of Trading and Markets: Assists the Commission in executing 

its responsibility for maintaining fair, orderly, and efficient markats, 

including day-to-day oversight of major securities market participants 

Selected a('tivities 

Published A Guide for Seniors: Protect Yourself Against Investment 

Fraud 

Produced reports on free lunch seminars and promising practices that 

businesses can undertake to prevent and detect fraud against older 

adults 

Maintains a website that allows investors are able to research 

investment advisor firms, and provides a link to a similar website for 

brokers on the Financial Industry Regulatory Authority's (FINRA) 

website 

Issues approximately 25 investor alerts and bulletins per year 

Works with FINRA, MRP, and state securities regulators on the 

Outsmarting Investment Fraud campaign, which is designed to reduce 

investment fraud among older adults 

Coordination with other agencies 

Member of Financial Fraud Enforcement Task Force, which brings 

numerQUS federal agencies together to prevent, investigate, and 

prosecute financial crime 

Participates in the multi-agency Financial Literacy and Education 

Commission, which coordinates federal financial education efforts and 

developed a national strategy for finanCial literacy 

Page 52 GAO·13·110 Elder Anancfal Exploitation 
124 

Appendix X: Examples of State and Local 

Activities to Prevent and Respond to Elder 

Financial Exploitation 

Efforts to Prevent Efforts to Provide 

Exploitation by Financial Infonnatlon to and 

Services Providers, Enhance Expertise for Efforts to Foster 

Power-of-Atiomey Efforts to Educate and Professionals Collaboration among 

Agenta, and Paid In-Home Infonn Older Adulta and Responding to Inotllutlons Responding 

State Caregivers the Goneral Public Exploitation to Exploitation 

California ~ §iO ~§rnirdinQ CQunty: InJijilyttt QO Aging San Erimg~QQ f;1~r 

Caregiver Ordinance - m Houses the San Financial Abuse 

all in-home caregivers Scam blasts are sent Francisco Elder Abuse Collaboration 

must submit to and to senior centers and Forensic Center, which Participants from 

pass a background law enforcement works to improve across local 

check and obtain a agencies to alert oider coordination among govemment and the 

permit to provide adults 01 potantial those responding to private sector. Goal is 

services scams. elder abuse cases; to conduct innovative 

~ "It's not your laulf assists victims; and and comprehensive 

publication -campaign educates professionals research and to bring 

Mandatory elder abuse to reduce elder and the general public stakeholders together 

reporting for health financial exploitation on preventing, to advocate for care professionals, stigma among older reporting. and stopping improved responses to social workers, nursing adults elder abuse elder financial abuse, 

home workers, and 

employees of banks §an e~r.nall'!inQ QQYWY §iU] E!l!Dg~gQ §i!O JQS!gyiO QwtlQ1 and credit unions A!tQme~Qtfi~~ m Multidisciplinary Teams 

Discretionary Communities Against Shift change briefings -representatives from 

background checks for and pocket guide to the fields of aging, civil 

paid In-home Senior Exploitation- elder abuse panal law, adult protective 

caregivers representatives from the codes for local law services, mental health, District Attorney's office enforcement social work, law 

Q~giUl!Di!ll Qf ~Q[QQf.iliQD§ provide examples of enforcement, and other 

Seniors Against financial fraud and tips for Center of Excellence on disciplines meet to personal safety and !;Igi( 812Ylii allg M~~g srt Investment Fraud- protecting personal ~ review complex abuse 

older adults are able to cases and to learn 

check the licensing information Central source of about service 

status of financial ~an ErS1ngi§~ Q!li.trig technical aSSistance, resources and 

services professionals 81tQm~:{li Qffi~ multidisciplinary intervention techniques. 

~Elder Financial Abuse training, research, and 

policy issues in CA and Sitn ~~mS!rQiDQ ~QYfJ1Y the Invisible Crime" - nationally Multidisciplinary outreach/public Teams-a variety of awareness campaign St!l!nforg Q§nmr fgr groups exist, and they with posters in different ~ discuss issues ranging languages urging Conducts research on from those specific to individuals to report financial fraud and the District Attorney suspected elder older adults population to limitad financial abuse to APS Created a financial capacity. Teams also 

Qig~!1m~nl Qf ~Q[9QcmiQOi fraud research center work on training and 

Seniors Against In collaboration with the discuss individual 

Investment Fraud- Financial Industry cases. 

Californians 

alerts and educates 

over the 

Regulatory AuthOrity ~ 

CA Financial Abuse age of 50 about ~~lifQrniS1 Qi§t£j~l ettg[O~:i§ Reporting Act- financial and ~ employees 01 banks investment fraud, 

PageS3 GAO·13·110 Elder Financial ExplOitation 
125 

Stale 

IIIInol8 

Appendix X: Examples of State and Local 

Actlvltl .. to Prevent and Respond to Elder 

Financial Exploitation 

Effor1s to Prevent 

Exploitation by Financial Service. Providers, 

Power-of-Attomey Effor1s to Educale and 

Agents, and Paid In-Home Infonn Older Adults and Caregivers the General Public 

Department on Aging 

Volunteer Money 

Management Program 

-a protective service 

for limited income 

seniors who need help 

managing their 

finances 

~ 

Mandatory elder abuse 

reporting for social 

services and health 

care professionals 

Power..af~attomey law 

enhanced to create 

liability for the agent in 

cases of abuse. If an 

agent violates the law, 

they will be required to 

repay what was stolen. 

Mandatory background 

checks for paid inhome caregivers 

common scams, and 

unscrupulous sales 

practices that 

specifically target 

seniors 

~ 

Department of Financial 

Website: provides 

infonnation for 

consumers on 

preventing and 

reporting elder financial 

exploitation,as well as 

information for banks 

on reporting 

requirements 

Department on Aging 

"Be a Savvy Senior" -

publications designed 

to raise older adults' 

awareness of financial 

exploitation and to 

teach them to look for 

the warning signs 

Attorney General 

Fraud alertsinfonnation on the 

most common seams 

perpetrated against 

seniors 

'When in Doubt, Check 

it Out" -consumer 

fraud hottine to learn of 

any complaints filed 

against a company 

before doing business 

with them 

"Every Cent Counts" -

tips for protecting 

finances of senior 

citizens 

Page 54 

Effor1s to Provide 

Infonnatlon to and 

Enhance Experllse for Professional. 

Responding to Exploitation 

Effor1s to Foeler Collaboration among Institutions Responding 

to Exploltstlon 

Provides training for and credit unions are 

police investigators required to report 

San francisco District ::~e:~~~:~~~ or 

~ law enforcement 

Provides training for authorities 

CA mandated reporters Financial Elder Abuse 

Elder Financial Protection ~ 

~ Consists of 

Events and training for Departments of 

financial professionals Corporations, 

Department on Aging 

B'SAFE program to 

train bank personnel on 

how to prevent, detect, 

and report financial 

explOitation 

"Protocol for Law 

Enforcament: 

Responding to Victims 

of Elder Abuse, Neglect, 

and Exploitation" 

- provides model 

guidelines and 

Insurance, Attorney 

General, and Aging. 

The roundtable hears 

from local members 

about issues that are of 

concern and 

detennin .. how the 

state might help. 

Department on Aging 

Multidisciplinary 

Teamsrepresentatives from 

law enforcement, 

medical, legal, clergy, 

finanCial, and mental 

health sectors consult 

on complex cases, 

support case workers, 

and improve 

networking among 

group members 

investigation Suburban Elder Justice procedures for law ~ 

~:~~':::~~~""'t'''=~?, Led by AgeOptions, 

was created in suburban ChicagO AAA, 

coliaboration with the the coalition worns to I!!inois Family Violence Improve COOf?lnation 

Coordinating Councils and cooperation 

"Reporting Elder =~:~~':.'cfe~~ Abuse: What law enforcement Professionals Need to 

Know" -pamphlet to Statewide 

raise awareness about 

elder abuse and TRIAD programs~aw 

enforcement officials, 

GAO·13·110 Elder Financial Exploitation 
126 

State 

NewYor!< 

Appendix X: Examples of State and Local 

Activities to Prevent and Respond to Elder 

Financial Exploitation 

Efforts to Prevent 

ExploltaUon by Financial 

Services Providers, 

Power-ol-Attomey Efforts to Educate and 

Agents, and Paid In-Home Inlonn Olde, Adulto and 

Careglvero the Gonerol Public 

l:IX.AE2 

Financial management 

-APS receives the 

older sdult's monthly 

income, pays their bills, 

and provides money to 

the olde' adult for incidentals 

Power-of-attorney 

controls-APS can 

require an accounting 

of funds from older 

adult's power-ofattorney agent 

Brookdale Center for 

Healthy Aging and 

Longeyity at Hunter College 

Daily Money 

Management Services 

-helps older adults 

make financial 

decisions or make 

financial decisions on 

behalf of older adults 

who are no longer able 

"Just Hang Up" -to 

wam seniors about 

telephone scams 

~ 

Cook County Sheriff's 

Senior Law 

Enforcement Academy 

-trains older adults on 

crime prevention 

NYC Department for Aging 

'It's my Money' game 

created a tool-in 

collaboration with the 

Department of 

Consumer Affairsthat can be used to 

help older adults avoid 

financial fraud and 

scams 

Study of prevalence of 

elder abuse in NY 

state, in conjunction 

with LifeSpan and Weill 

Cornell Medical college 

Attorney General 

"Smart Seniors~ 

publication -a guide 

for older adults to help 

guard against scams 

and prevent elder 

abuse 

Efforts to Provide 

Intonnatlon to and 

Enhance Expertl.e 10' 

Professionals 

Reepondlng to 

Exploitation 

reporting requirements 

Attorney Genera! 

Elderly Service Officer 

Program-40 hours of 

elder abuse training for 

law enforcement 

officers 

Department of FinanCial and Professional Regulatjon 

and Department on Aging 

Training for stat~ 

chartered bank 

employees-a training 

was developed to identify the indicators of 

financial explOitation, as 

well as how to report. 

Compliance wili be 

checked for during bank 

examinations. 

NY State Office of Children 

and Family Seryices 

Bureau of Adult Services 

Training on 

investigating financial 

exploitation for 

protective services 

caseworkers 

Weill Cornel! Medical 

College Qivision of 

Geriatrics and Gerontology 

Project on Elder Abuse 

and Neglect-conducts 

research and. provides 

training on elder abuse, 

including financial 

exploitation 

Brookdale Center for 

Healthy Aging and 

longevity at Hunter College 

Primary trainer of APS 

workers in NY state 

Efforts to Foste, 

Collaboration among 

InstltuUons Responding 

to Exploitation 

as well as senior 

community advocates 

and other community 

activists. TRIAD 

activities help 

implement crime 

prevention, education 

and volunteer programs 

for older citizens. 

NYC Elder Abuse Center 

Goal is to improve 

professional, 

organizational and 

system responses to 

e1der abuse, neglect 

and exploitation 

through collaboration 

and coordination 

among agencies 

Multidisciplinary 

Teamsrepresentatives from the 

health, mental health, 

public safety, legal, 

victim assistance, and 

social services sectors 

review, discuss, and 

coordinate cases of 

elder abuse; identify 

problems that can be 

brought to the attention 

of others for strategizing 

and intervention; and 

identify research needs 

Page 55 GAO·13.110 Elder Financial Exploitation 
127 

State 

Pennsylvania 

Appendix X: Examples of State and Local 

Acttvltl .. to Prevent and Respond to Elder 

Financial Exploitation 

Efforts to Prevent 

Exploitation by FinanCial 

Services Providers, 

Power-of.Attorney Efforts to Educata and Agents, and Paid In·Home Inform Older Adults and 

Careglvere the General Public 

~ 

Revised PowerRofR 

attorney form 

Mandatory background 

checks for paid inhome caregivers 

l:fiEQ 

Community outreach at 

senior centers 

NYC Department of 

Consumer Affajrs 

"Be a Sawy Senior" - guide for older adults 

~ Attorney General 

Mandatory reporting for. Senior Consumer 

healthcare Referenoe Guide -

professionals information on how to 

Mandatory background avoid scams and fraud 

checks for paid in· Senior Crime 

home caregivers Prevention University 

PA Securities Commjssion 

Investor alerts - a 

collection of tips, 

techniques, and 

advisories for investors 

- outreach program to make older adults 

aware of common 

scams, to teach them 

how to avoid becoming 

a victim, and to know 

whom to alert when 

they are concerned 

about their safety and 

well-being 

"Safe Senion;" 

Pamphletinfonnation for older 

adults on how to 

protect themselves 

from abuse, inciuding 

financial exploitation 

Toll-free senior help 

line 

Efforts to Provide 

Information to and 

Enhance Expertise for Professionals 

Responding to Exploitation 

Institute on protective 

ServiceS at Temple 

l.!r!iltmilx Staff at the Institute, 

including a financial 

accountant, provide 

investigative assistance 

to APS and law 

enforcement for elder 

financial explOitation 

cases 

Develops curriculum 

and provides training to 

APS 

Philadelphia Corporation for 

~ 

Staff member who only works on finanCial 

exploitation cases 

Training to bank 

employees, local 

prosecutors, and other 

professionals on elder 

financial exploitation 

Efforts to Fostar Collaboration among 

Instltutlono Responding 

to Exploitation 

NYC Elder Abyse Network 

Brings polioe, district attorneys' offices, 

social service agencies, 

and othen; together to discuss legislation, 

pOlicy, research, and 

program planning 

Weinberg Center for Elder 

Abuse Prevention 

Emergency shelter for victims of elder abuse 

District Attorney's OfficeS 

Elder Abuse or Financial Crimes units 

with staff working 

specifically on elder 

financial exploitation 

Philadelphia Financial 

Exploitation Task Force 

Collaboration between 

APS, lawenforoement, 

and private sector, with 

the goal of promoting 

awareness and 

prevention campaigns, 

delivering training, and 

increasing their joint 

capacity to conduct 

focused investigations 

and effectively 

prosecute cases 

~ 

Elder Abuse Task 

Foroes - task forces review elder abuse 

cases on a regular 

basis and membership 

may include APS, law 

enforcement, judges, 

ciergy, bankers, healthcare providers, or 

others 

Page 56 GAOR13-110 Elder Financial Exploltatlor 
128 

State 

Appendix X: Examples of State and Local 

ActlvlUes to Prevent and Respond to Elder 

Financial Exploitation 

Efforts to Prevent 

Exploitation by Financial 

Services Providers, 

Power-of-Altomey 

Agents, and Paid In-Home 

Caregivers 

Efforts to Educate and 

Inform Older Adults and 

the General Public 

~ 

Philadelphia Police 

Outreach at senior 

centers 

PA Securities Commission 

Elder Investment Fraud 

and Financial 

Exploitation Prevention 

Program (EIFFE)-

educates medical 

professionals about 

how to spot older 

adulls who may be 

particularly vulnerable 

to financial abuse and 

then to refer suspected 

investment fraud 

involving these at-risk 

patients to state 

securities regulators 

and/or to APS 

"Confessions of a 

Scam Artlsf 

publicationinformation to raise 

awareness 

Department of Banking 

~Protect Yourself, 

Protect Your Money~­

publication includes 

information on common scams and 

tips on avoiding scams 

Efforts to Provide 

Information to and 

Enhance expertise for 

Professionals 

Responding to 

Exploitation 

Adult Protective Services 

~ 

State law grants APS 

access to bank records 

for elder financial 

exploitation 

investigations 

PA Securities Commission 

ABCs forAPS 

Professionalsinformation for APS 

workers on how to identify investment 

fraud 

Attorney Genera! 

Elder Abuse Unitinvestigates and 

prosecutes elder 

financial exploitation 

~ 

Philadelphia Police 

Crimes Against Retired 

and Elderly Unftinvestigates crimes affecting older adults 

SeniorLAW Center 

Provides legal 

assistance to senior 

crime victims 

Efforts to Foster 

Collaboration among 

Institutions Rssponding 

to Exploitation 

Source: GAO Intetviews and rev!8'I\I of documents from calIfornia, lHlnoIs, New yor1t and Penntylvanla 

Page 51 GAO .. 13-110 Elder FinanCial exploitation 
129 

Appendix XI: Examples of Non-Governmental 

Organization Activities to Prevent and Respond 

to Elder Financial Exploitation 

AARP 

AARP is a nonpront, 

nonpartisan organization. 

with a membership of 

more than 37 million, that 

helps people age 50 and 

above have 

independence, choice, and control in ways that 

are beneficia! to them 

and society as a who/e. 

Efforts to Prevent 

Exploitation by 

Financial Services 

Provlderst Power..of .. 

Attorney Agents. and 

Paid In-Home 

Careglvere 

Free Lunch Monitor 

f.r2!!!El AARPasks 

members to send 

them invitations 

they receive to free 

lunch seminars that 

sell investment 

products. Members 

also attend and 

report back to 

AARP on the 

speCific investment 

offers. AARP has 

compiled 

information on the 

trustworthiness of 

these investment 

sales pitches. 

Page 58 

Efforts to Educate and 

Inlonn Older Adults and 

the General Public 

Protecting Your Assets 

fmi§&! 

Project provides basic 

tips on avoiding fraud 

to AARP members, 

including email blasts 

and website links for 

additional infonnation 

No Free Lunch program 

Provides information 

on responding to high 

pressure sales tactics on AARP's website, as 

well as information on 

senior financial advisor 

designations 

Research Proiec1s Related to 

~ 

Elder Financial 

AARP has conducted 

several research 

projects related to 

elder financial 

explOitation including 

studies of: 

personality traits of 

fraud victims and 

effective prevention 

messages, 

effective outreach 

activities for investor 

fraud victims, 

diminished financial 

capacity of older adults 

and implications for the 

financial services 

industry, 

preventing the use of 

misleading senior 

deSignations, 

power..af~attorney 

abuse and what states 

can do about it, 

Efforts to Provide 

Inlonnatlon to and 

Enhance Expertlee lor 

Professionals 

Responding to 

Exploitation 

MoSaie program 

In conjunction with 

the Missouri 

Bankers 

ASSOCiation, the 

AARP Missouri 

state office 

developed a training 

program for bank 

clerks on financial 

exploitation 

Efforts to Foster 

Collaboration among 

Institutions 

Responding to 

Exploitation 

GAO~13.110 Elder FInancial Exploitation 
130 

American Bar 

Association 

A voluntary professional 

organization. The mission 

of the American Bar 

Association Commission 

on Law and Aging is to 

strengthen and secule 

the legal rights, dignity, 

autonomy, quality of life, 

and quality of care of 

elders, 

American Bankers 

Association 

Represents banks of all 

sizes and types and is 

the voice for the nation's 

banking industry and its 

employees 

Appendix XI: Examples of Non-Govemmental 

OrganiZatIon ActIvities to Prevant and 

Respond to Elder Financial Exploitation 

Efforts to Prevent 

Exploitation by 

Financial Services 

Providers, Power..of· Attorney Agents, and 

Paid In·Home 

Careglve", 

Efforts to Provide 

r Infonnatlon to and 

Enhance Expertise for 

Professionals 

Responding to 

Exploitation 

Efforts to Educate and 

Infonn Older Adulta and 

the General Public 

and 

background checks 

and other screenings 

for home care 

providers 

Research Protects Related 

to 

~ 

Elder Financial 

Several research 

projects related to 

elder financial 

explOitation have been 

conducted, including 

studiesot: 

state APS laws and 

types of elder abuse, 

bank employees and 

their ability to report 

elder financial 

exploitation, 

court-focused elder 

abuse initiatives, and 

elder abuse registries 

Protecting the Elderly From 

Financial Abuse pamphlet 

Pamphlet is designed 

for older adults and the 

general public. a 

includes information on 

signs of financial 

abuse, protecting from 

financial abuse, and 

what to do if someone 

suspects financial 

abuse. 

Continuing Lega! 

Education Seminars 

Webinars on topics 

related to elder 

abuse 

InfOrmation for members 

Shares information 

with members on 

how to identify elder 

financial exploitation 

Provides information 

via conferences and 

phone briefings to its members on 

federal bank privacy 

laws, encouraging 

members to report 

suspicious activity 

Frontline Training for 

Bank Employees 

Consumer 

protection and 

privacy training is 

intended for fronmne 

Efforts to Foster 

Collaboration among 

Institutions 

Responding to 

Exploitation 

Page 59 GAO·13·110 Elder Financial exploitation 
131 

National Adult 

Protective Services 

Association 

A national non-profit with over 500 members in a/l fifty states. Provides state and local Adult Protective 

Services program 

administrators and staff with a forum for sharing 

information, solving 

problems, and improving 

the quality of services for 

victims of elder and 

vulnerable adult abuse, 

Appendix XI: Examples of NonwGovernmental 

Organization Actlvltl .. to Prevent and 

Respond to Elder Financial Exploitation 

Efforts to Prevent 

Exploitation by 

Financial Services 

Providers, Power-ofAttomey Agents, and 

Paid In-Home 

Caregivers 

Efforts to Educate and 

Infonn Older Adults and 

the General Public 

Efforts to Provide 

Infonnatlon to and 

Enhance Expertise for 

Professionals 

Responding to 

Exploitation 

bank employees. 

Training includes 

various aspects of 

consumer 

protection, including 

elder financial 

exploitation. 

Bank Compliance 

Magazine article JulyAugust 2011 edition 

In a magazine 

distributed to banks, 

types of eldar 

financial 

exploitation, why 

older adults are 

particularly 

vulnerable, the role 

of banks, and 

relevant state and 

federal laws were 

described 

Research projects Related National Adult Protective 

~ 

to Elder Financial SeMces Resource 

~ 

Currently conducting a 

baseline survey of 

state APS programs 

Report on state APS 

responses to financial 

exploitation of 

vulnerable adults 

Runs the Resource 

Center, which is 

funded by the 

Administration on Aging 

Nationa! Conference 

Hosts a conference 

forAPS 

professionals and 

several sessions are 

usually dedicated to 

elder financial 

exploitation 

~ 

Hosts webinars on 

various topics 

related to elder 

abuse for APS 

Efforts to Foster 

Collaboration among 

Institutions 

Responding to exploitation 

Pag.GO GAO·13~110 Elder Financial Exp1oltatlon 
132 

Financial Industry 

Regulatory Authority 

The largest independent 

regulator for an securifies 

firms doing business in 

the United States. Its 

mission is to protect 

America's investors by 

making sure the 

securities industry 

operates fairly and 

honestly_ 

Investor Protection 

Trust 

A nonprofit organization 

devoted to investor 

educafion. The primary 

miss;on is to provide 

Appendix XI: Examples of Non..Govemmental 

Organization Actlvltles to Prevent and Respond to Elder Financial exploitation 

Efforts to Prevent 

Exploitation by 

Financial Services 

Provide,., Power~of~ 

Attorney Agents, and 

Paid In·Home Caregivers 

~ 

Q21I~~ jo.yg!ilQr 

Investors are able 

to make complaints via its website, 

phone, fax, or mail. 

~I!j§r In~UD~ml Friyg 

BoQ EinalKiial 

ExWojtation prevention 

~ 

The program 

educates medical 

Efforts to Educate and 

Inform Older Adults and the General Public 

Inv§!itQ[ Alg!l§ 

Disseminates 

information about 

scams, trends, or new 

financial products 

B~§~5!rQb ef.2i~!i ~!me!j to 

~ 

Elder Financial 

Conducted several 

research projects 

related to elder 

finandal exploitation, 

including studies of: 

Investment fraud 

National Financial 

Capability Study 

Senior Investor 

Literacy and Fraud 

Susceptibility 

Senior Fraud Risk 

Senior Financial 

Advisor Designations 

Be§!2~rch P[Qi!ltg§ R~lamg 

lQ 

~ 

El.Q~r Eim.mg~1 

Surveyed older adults 

and their families about handling personal 

Efforts to Provide 

Information to and 

Enhance Expertise for Professionals 

Responding to 

Exploitation 

professionals 

Creating APS Core 

Training 

Working with 

California officials to 

create core competencies for 

APS workers, which 

would include 

financial 

exploitation, with a 

goal of cmating 

national core training for APS 

workers 

Efforts to Foster Collaboration among 

Institutions 

Rospondlng to Exploitation 

CQllaboration wjth 

~ 

federal and state 

• Works ciosely with 

the Securities and Exchange 

Commission on investor education 

and examinations 

• Works with state 

securities regulators 

on investor education 

campaigns 

Collaboration wjth other 

nOfK]ovemmeota! 

2WllW!!iIlll 

Together with the 

Stanford Center on Longevity, founded a 

financial fraud research 

center 

Page 61 GAO~1a..110 Elder Financial Exploitation 
133 

independent, objective 

inlonnation needed by 

consumers to make 

informed investment 

decisions. 

Financial Services 

Roundtable, BITS 

The mission of the 

Financial Services 

Roundtable is to protect 

and promote the 

economic vitality and 

integrity of its members 

and the United States 

financial system. BITS 

addresses issues at the intersection of financial 

services, technology and 

public policy, such as 

critical infrastructure 

protection, fraud 

prevention, and the safety 

of financial services. 

Appendix XI: Example. of Non-Governmental 

Organization AcUvitlea to Prevent and Respond to Elder Financial Exploitation 

Efforts to Prevent 

Exploltatlon by 

Financial Servlcos 

Providers, PoweroOf .. 

Attorney Agenta, and 

Paid In-Home 

Careglvere 

profesSionals on 

how to spot older 

Americans who 

may ba particularly 

vulnerable to financial abuse, 

particularly those 

with mild cognitive 

impairment, and 

then to refer 

suspected 

investment fraud 

involving these atrisk patients to 

state securities 

regulators and/or to 

10caiAPS 

professionals. 

Efforts to Educate and 

Inform Older Adulta and 

the General Public 

finances, current 

financial conditions, 

and experiences with 

financial fraud or 

abuse. 

Surveyed experts 

about elder financial 

explOitation. 

National Call-in Day· 

protecting Elders from 

Fjnancial Abuse 

Hosted a call~n day, in 

collaboration with other 

organizations, for older 

adults and their 

families to receive free advice and guidance 

on protecting against 

investment swindles 

and financial abuse 

Contains fraud 

prevention tips for 

consumers and for 

organizations working 

with older adutts 

Efforts to Provide 

Information to and 

Enhance expertise for 

Professionals 

Responding to 

exploitation 

BITS Fraud Prevention 

Toolkit 

Information for 

banks on the role of 

financial institutions 

in preventing and 

responding to elder 

financial 

exploitation, red 

flags and types 01 

offenders and 

scams, and the role 

olAPS 

Efforts to Foster 

Collaboration among 

Institutions 

Responding to 

Exploitation 

CoUaboration with state and local governments 

and other nongoyernmental 

organizations 

Older Americans 

Financial Abuse 

Prevention Working 

Group 

Page 62 GAO .. 13.110 EJderFlnanclal Exploitation 
134 

Appendix XII: Criminal Background Check 

Requirements for In-home Caregivers in 

Selected States 

Slate 

California 

Illinois 

New York 

Checks for Publicly 

Criminal Background Funded Care Only or 

Check. Mandatory Publicly and Privately 

or Discretionary? Funded Care? 

Discretionary 

Mandatory 

Mandatory 

Publicly & privately 

fundad care 

Publicly & privately 

funded care 

Publicly & privately 

fundad care 

Type of 

Background 

Check 

Conditional 

Employment 

Allowed?' 

State and federal State does not 

spscify 

State only Yes 

State and Yes 

sometimes 

federal 

Disqualifying Offenses 

Offenses that are against 

dependent or vulnerable 

individuals or fraud-relatad 

Homicide; other violent, 

sex-related, drug-related, 

fraud-related; and property 

offenses 

Homicide; other violent, 

sex-related, drug-related, 

and fraud-related offenses; 

and offenses against 

dependent or vulnerable 

individuals 

Pennsylvania Mandatory Publicly & privately State and Yes Homicide; other violent. 

sex-relatad , drug-related, 

and fraud~related offenses; 

and offenses against 

dependent or vulnerable 

individuals 

funded care sometimes 

federal 

SOurce: AARP P®I!e Policy Institute. ($ep1ember2010) Saf$ at Home? Developing Effective Crilfllnai Background Checks and Other 

SCIlI8n1ng PoIici8$ forHome Care WOIt.&rs 

Note: Information is as of December 2008 . 

• Conditional employment occurs Vwtlen inwhome caregivers are allowed to begin working before 

background checks are complete, 

Page 63 GAO~1"'110 Elder Financial ExplottatJon 
135 

Appendix XIII: Resource Centers Supported 

by the Administration on Aging 

Name 

National Center on 

Elder Abuse 

Intended Users 

National, state, and local professionals working with 

victims of elder mistreatment, including APS 

professionals, state and federal agencies, law 

enforcement, legal professionals, health care 

professionals, domestic violence networks, 

community~based organizations, elder rights 

advocates 

Public policymakers 

Researchers 

Genera! public 

National Adult Adult Protective Services professionals nationwide 

Protective Services 

Resource Center 

National Legal Professionals involved in protecting the rights of 

Resource Center older persons, including: 

Providers of legal assistance, including senior legal 

helplines 

State and local APS profeSSionals 

Elder rights advocates 

Infonnation and Services 

Disseminates news items related to elder abuse 

Operates a listserv for professionals 

Provides information about promising practices and 

interventions 

Provides a training library 

Funds research 

Disseminates a monthly newsletter 

Maintains an AP$-specific lismarv 

Publishes brief descriptions of recent applicable research 

Holds regular webcasts 

Collects and compiles detailed infonnation about APS 

throughout the country 

Provides inlolmation to state and local APS programs to 

facilitate implementation of identified best practices and 

research findings 

Disseminates information on a wide range of legal issues 

aflectng older adults 

Training on legal issues 

Technical assistance on the provision of legal services to older adults 

Case consultation, including on elder financial 

exploitation cases 

SO\JI'Ce: GAO anaIy$ill ofiflfOf!118tlon provided by NCEA, National Adult Pl'otective SlIIrviO&l Resource Center, Md National legal 

ReJourceCenter. 

Pago64 GAO·13-110 EldorFlnanc!al exploitation 
136 

Page 65 

Here arethe-defiJritive results: 

MR YOU HAVE REALLY WON! 

This is no joke. It is true~ 

YOU HAVE BEEN CONFIRMEO AS THE MAIN WINNER 

Of II CHECK!' 

GAO~13·110 E!der Flnandal Exploitation 
137 

Appendix XV: Total Number of FTC 

Consumer Sentinel Network Complaints by 

Source, CY 2011 

Source Number of Complaints Percent oITola1 

Complaints made directly to the FTC, by individuals and others' 788,576 43% 

Better Business Bureaus 416,520 23% 

Internet Crime Complaint Centers 302,381 17% 

Western Union Money Transfer 54,657 3% 

Canadian Anti~Fraud Centre 39,260 2% 

Publisher's Clearinghouse 37,311 2% 

Others (such as state and local agencies and U.S. Postallnspactors) 174,375 10% 

TOTAL 1,813,080 100% 

Souroe:FTC 

-"hese complaints may be made by phone, mall, or on the FTC's website. 

bThe Internet Crime Compialnt Center, CG-sponsored by the FBI and the National White Cotlar Crime 

Center, collects Internet-related criminal complaints and aims to further research, develop, and refer 

these complaints to appropriate federal, state. local, and international agencies, 

PagoS6 GAO-13--110 ElderFlnancfal exploitation 
138 

Appendix XVI: Comments from the 

Consumer Financial Protection Bureau 

cfpb=::::::-

November 7. 2012 

Ms. Kay E. Brown 

Director, Education. Workforce. and tncome Security (ssues U.s. GovemmentAccountabillty Office 

441 GS"....,NW 

Washington. DC 20548 

Dear Ms. Brown: 

Than1cyou for the opportunity to comment on the Government 

Ae<ountabUity Office'. (GAO) draft report, Elder Jrmice, _on./ Strategy 

Needed to Effectively Combat Elder Financial Exploitation. GA~13·110. 

The report reviews the harmful effect of financial exploitation on older 

Americans. Although the report finds that eombating elder financial 

exploItation's prtmarilythe responsiblUty'Of state and local agencies. it 

calls for implementatlon of a multi-faceted soJutlon.lnduding 

collaboratfon among federal agendes. Since the Consumer financial 

Protection Bureau's (CFPB or Bureau) Office for Older Americans began 

its operations. we have developed several initiatives that win directly 

assist older consumers and those who provide services to them. We are 

actively developing coUaboratlve relationships on the federal. state and 

local level, with public and private entities, for CUJTent and future targeted 

strategies. As the only rederal office sped6caUy dedicated to the financial 

health of Americans aged 62 and older, we be1leve we can make a unique 

contribution in this area. 

The CFPB agrees that a collaborative and coordinated effort by federal 

agendes can help optimize strategies to combat thl$ threat to the well· 

being of older Americans. In October 20U. the Bureau Joined with ten 

other federal agendes to convene the federal Elder Justice Coordinating 

Council. The Coundlls expected to serve as an important avenue to 

coordinate strategy to prevent, detect and redress elder abuse, including 

finandal exploitation. 

Page 67 GAO·13·110 Elder Flnancla' Exploitation 
139 

Appendix XVI: Comments from the Consumer 

Financial Protection Bureau 

We concur with the recommendations addressed to the CFPB in the draft 

report. We agreethat the Bureau should develop and dtssemlnate Infonnation for financial institutions on the circumstances under which 

they would not violate relevant Federal consumer financial taws, should 

they release relevant bank records to law enfortementand Adult 

Protective Services (ApS) agencies. Financial institutions (including 

banks, credit unions and other "non·bank'" proVJdersof consumer 

financial products and services supervised bytb.e Bureau) can playa key role in preventing and detecting elder financial exploitation. Prompt 

reporting of suspectt'ld abuse can trigger appropriate intervention,. 

prevention or financial lasses. and ather remedIes, 

Uke GAO. the Bureau has heard concerns and questions from financial 

Institutions as to whether sharIng personal account holder information 

when reporting elder financial exploitation Is permissible under federal 

law, The Gramm·Leach .. SlUey Act (GL8A) establishes privacy protections 

for account holders but provides several spetific exceptions to the notice and opt--out requirements generally imposed by GLSA before nonpublic 

personal information can beshared WIth nonaffiliated. third parties. These 

exceptiOns generally permit the sharing ofnonpublkpersonallnformation with state and federal agencies for the purpose of reporting suspected 

elder financial abuse. The CPPB's Office. fQr Oider Americans .. in 

collaboration with other Bureau offices, is developing strategies for 

communicating clearly to a spectrum of financial institutions that GLBA 

gencraJlydoes not prohibit them from reporting suspected abuse to-or 

respond to requests for personal information from-law enforcement 

APS agencies. and other relevant ent!tles. Inaddttion. the Bureau is 

apJorfng options for collaborating with other federal agendas in providing this gufdance to flnanclallnsdtutlcns. Through its efforts, the 

Bureau hopes to convey that these actions are permissible and important. 

In addition, we agree that the Bureau can playa key role in developing a 

plan to educate finanCial institutifJnS 'On how to recQgni'te and report elder 

financial exploitation. The Bureau has received requests from financial 

Institutlonsa;bout the availability of staff training programs. The Office for 

Older Americans has collected Information on training programs thata~ 

currently available or in use by financial Institutions. We ate considering 

options for how best: to help financial Institutions that request information 

Page 68 GA()..13--110 Elder Financial Exploitation 
140 

Appendix XVI: Comments from the Consumer 

Financial Protection Bureau 

on cumcula and materials for their staff about Identifying and reporting 

elder Onandal exploitation. 

Tbankyou again for the opportunity to comment on the draft report. 

Sincerely. 

"L"~+~~~-::;;';" 

Assistant 

HubertH. 

Director 

HUmPbreYJli' ~ 

Office of Financial Protection for Older Americans 

Page 69 GAO·13~110 Elder Financial Exploitation 
141 

Appendix XVII: Comments from the 

Department of Health and Human Services 

troye fa 

KayE, Brown Director. Education, Worfd'orce. and _ Security J ..... 

u.s. Oovcmment AceoUD1abi1ity Office 

441 GSt=tNW 

Wasbington, DC 20548 

Dear Ms. Brown: 

Altached ... ......-ontho U.s. o.-nt A<:CO\lI1tIIbilityOffice" (GAO)_cntitled, 

"Bider Justice: National Strategy Needed to Effectively Combat BIder F'mancial Exploitation" 

(GAO-\3-\\O). 

The Department appreciates the opportunity to review this report prior to publication. 

Sinc=ly, 

c~~~ Assistant Secte1aty for Legislation 

Page 70 GA0-13M110 Elder FInancial exploitation 
142 

Appendix XVII: Comments from the 

Department of Health and Human Services 

The Department ~ the opportunity., lOView and co ... ", .. 00 1hi. dmft report. The 

"""_ for IIIIS..., COIIIlatart with wbatwe boaIddurlngthe Inaugural mectlngof!he Elder Justice CooIdmatillg CouoeiI.· W. vicwthe Inaugural meeting of the CooIdmatiIIg Council .. ahuao ........ Durillgthemeotillg. wcbJahliibtod!he activiticsof_ ........ ., 

addr<os elder justice Usues broadly, and specifically financial cspIoltation. ~ from !he 

field and COUIIClI members, ioeIudiIIg OAO,dillCllSS!:d...,..for_on .. avoid duplication in federal cffi>ris, _calliIIg foraddili __ and opportuniti .. .,_ our __ absent appropristions. 

HIlS has submitted ""'_ previously to impIcmcnt portions of!he Elder Justice Al:t, ioeIudiIIg 

tho<eln",!ving ds1a,!he Coordinsting Council, and other eflbrts!hst would begin"- these recom:mendations. We look forward to working with Congress to continue implementation 

of !he Elder Justice Mt. 

Page 71 GAo.13-110 Elder Financial Exploitation 
143 

Appendix XVIII: GAO Contacts and Staff 

Acknowledgements 

GAO Contacts: 

Staff 

Acknowledgements: 

Kay E. Brown, (202) 512-7215 or brownke@gao.gov. 

In addition to the contacts named above, Clarita Mrena, Eve Weisberg, 

Andrea Dawson, and Brittni Milam made significant contributions to this 

report, in all aspects of the work. 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. 

Pago72 GAO-13-110 Eldor FInancial exploitation 
144 

Related GAO Products 

(131134) 

Incapacitated Adults: Oversight of Federal Fiduciaries and CourtAppointed Guardians Needs Improvement. GAO-11-678. Washington, 

D. C.: July 22, 2011. 

Elder Justice: Stronger Federal Leadership Could Help Improve 

Response to Elder Abuse. GA0-11-384T. Washington, D.C.: March 2, 

2011 

Elder Justice: Stronger Federal Leadership Could Enhance National 

Response to Elder Abuse. GA0-11-208, Washington, D.C.: March 2, 

2011 

Older Americans Act: More Should Be Done to Measure the Extent of 

Unmet Need for SeNices. GAO-11-237. Washington, D.C.: February 28, 

2011. 

Consumer Finance: Regulatory Coverage Generally Exists for Financial 

Planners, but Consumer Protection Issues Remain. GAO-11-235. 

Washington, D.C.: January 18, 2011. 

Guardianships: Cases of Financial Exploitation, Neglect, and Abuse of 

Seniors. GA0-1 0-1 046. Washington, D.C.: September 30,2010. 

Guardianships: Little Progress in Ensuring Protection for Incapacitated 

Elderly People. GAO-06-1086T. Washington, D.C.: September 7,2006. 

Results-Oriented Government: Practices That Can Help Enhance and 

Sustain Collaboration among Federal Agencies. GAO-06-15. Washington, 

D.C.: October 21,2005. 

Guardianships: Collaboration Needed to Protect Incapacitated Elderly 

People. GAO-04-655. Washington, D.C.: July 13, 2004. 

Paga73 GAO·13-110 Elder Financial exploitation 
145 

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146 

Senator Bernie Sanders 

Statement for the Record 

America's Invisible Epidemic: Preventing Elder Financial Abuse 

Thursday, November 15th 2012 

Thank you to Chainnan Kohl, Ranking Member Corker, and members of the Special Committee. 

We are here today to learn about the very serious issue of senior financial abuse. As Chainnan of 

the Subcommittee on Primary Health and Aging, which has jurisdiction over the Older 

Americans Act and elder abuse, I recognize the need for greater attention to this critical issue. 

This country is experiencing an epidemic of senior financial abuse - which is both a moral crisis 

and a financial scandal. In the United States seniors face a very real threat as targets for scams 

and abuse. 

Several of the witnesses today will testify that financial exploitation costs older adults $2.9 

billion a year! Let's just think about that number for a minute. Many seniors across this country 

are struggling to make ends meet, and it appalling that they are being taken advantage of in times 

of great need. If we consider that most cases of elder abuse are never reported, the cost to our 

country of continuing to keep our head in the sand about this issue is overwhelming. 

Despite the fact that the Elder Justice Act was passed over two years ago, most of its provisions 

have never been funded. And although I commend the administration for commemorating the 

seventh annual World Elder Abuse Awareness Day and convening the first meeting of the Elder 

Justice Coordinating Council, the Administration can and should do more - for example, by 

implementing provisions of the Elder Justice Act that do not require funding, such as issuing 

much needed guidance documents that would promote elder justice research. This country's 

attention to the issue of elder abuse lags 40 years behind child abuse and 20 years behind 

domestic violence, and both the Administration and Congress must do much more to protect our 

seniors. 

We must also strengthen and reauthorize the Older Americans Act, which includes important 

funding for the Administration on Aging, a critical federal partner in preventing elder abuse and 

providing seniors with important protections and legal services. 

In my home state of Vennont, a working group on Protecting Older Consumers is considering a 

range of proposals to prevent and reduce consumer fraud among seniors, including enhanced 

civil penalties and protections, improved prevention efforts, and additional research. I'm proud 

that the Attorney General's office in Vennont is spearheading this effort in collaboration with 

both the public and private sector. 

We must remember that financially exploited seniors are often embarrassed, scared, and 

vulnerable. They may be reluctant to speak out about their experience. And if their family 

members or friends are the people exploiting them, these seniors may not have anyone to whom 

to tum. Unlike big corporations, these seniors do not have highly-paid lobbyists speaking up for 

1 
147 

them. So we, as their elected officials, must seek out their stories and share their message for 

change to take place. 

And in the case of financial exploitation, there is not only a moral argument for improving our 

efforts, but we also know that elder abuse is an incredibly expensive problem. If seniors are 

scarnmed and lose their savings and homes, federal programs such as Medicare and Medicaid 

bear the cost of seniors moving into nursing homes and increased health care costs. In fact, a 

recent report of 80 cases in Utah found that the state's Medicaid program would potentially have 

to pay almost a million dollars to cover care for seniors who had suffered substantial losses in 

that state. Multiply that times fifty states and you see some staggering costs. 

I look forward to hearing the witnesses this afternoon share their expertise and ideas on how to 

prevent and address financial exploitation. 

2 
148 

Written Statement of 

GerriWalsh 

Vice President, Office of Investor Education 

Financial Industry Regulatory Authority 

Before the Special Committee on Aging 

United States Senate 

November 16,2012 

Chairman Kohl, Ranking Member Corker and Members of the Committee: 

The Financial Industry Regulatory Authority (FINRA) appreciates the opportunity to submit this 

statement for the record of the Committee's hearing to examine fraud among senior investors. 

Our comments focus on the outreach and educational initiatives FINRA has underway to protect 

all investors-including seniors-from falling victim to financial fraud. 

FINRA and the FINRA Investor Education Foundation 

FINRA is the largest non-governmental regulator for all securities firms doing business with the 

public in the United States. FINRA oversees nearly 4,345 brokerage firms and about 162,410 

branch offices, and more than 635,140 registered securities representatives. We touch virtually 

every aspect of the securities business-from registering and educating industry partiCipants to 

examining securities firms; writing rules; enforcing those rules and the federal securities laws; 

informing and educating the investing public; providing trade reporting and other industry 

utilities; and administering the largest dispute resolution forum for investors and registered firms. 

FINRA believes that investor education is a critical component of investor protection-and that 

we are uniquely positioned to provide valuable educational information and tools to retail 

investors. Over the last decade, we have worked hard to develop a strong investor education 

outreach program. We produce alerts, interactive tools and educational content to help investors 

make wise financial decisions. Our BrokerCheck tool, for example, provides investors with a 

quick way to check a broker's disciplinary and professional background. Encouraging people to 
149 

take this simple step before doing business-or continuing to do business-with a broker is part 

of our greater commitment to protecting investors. 

In 2003, FINRA created the FINRA Investor Education Foundation, currently the largest 

foundation in the United States dedicated to investor education. The FINRA Foundation seeks 

to provide underserved Americans with the knowledge, skills and tools necessary for financial 

success throughout life. To date, the FINRA Foundation has approved approximately $73 

million in financial education and investor protection initiatives through a combination of 

educational and research grants, as well as targeted projects managed directly by the FINRA 

Foundation. 

How FINRA Protects Older Investors 

At FINRA, we serve every U.S. investor, from newlyweds planning to buy a home to parents 

saving for a child's college education to seniors depending on a secure retirement. Over the 

past five years, we have been keenly focused on issues impacting older investors, especially 

those at or approaching retirement. For example, in September 2007, FINRA issued Regulatory 

Notice 07-43, which highlighted certain issues common to many older investors-including 

suitability, senior- or retirement-specific credentials or professional designations, high-pressure 

sales seminars and diminished capacity. The Notice reminded broker-dealers of their 

obligations in this area and provided examples of industry best practices. That same year, 

FINRA's Member Education and Training Department launched the first in a series of webcasts 

to help registered representatives and other frontline brokerage firm employees learn about their 

compliance obligations when working with senior customers. Topics in this free educational 

series include Senior Investor Issues: Diminished Decisional Capacity, Senior Investor 

Suitability Considerations and Supervisory Considerations for Working with Seniors-and are 

available at www.finra.orgllndustryllssuesiSeniors. 

In 2008 and 2010, FINRA joined with other regulators to issue findings and guidance on firms' 

practices relative to senior investors. More recently, at the beginning of 2011, FINRA issued its 

Annual Regulatory and Examination Priorities Letter, which reiterated that the protection of 

vulnerable customers, including senior investors, continues to be a high regulatory priority-and 

that one area of particular focus is the use of certifications and designations that imply 

expertise, certification, training or specialty in advising senior investors. And in November 2011. 

2 
150 

FINRA published Regulatory Notice 11-52: FINRA Reminds Firms of Their Obligations 

Regarding the Supervision of Registered Persons Using Senior Designations to remind firms of 

their supervisory obligations regarding the use of certifications and designations that imply 

expertise, certification, training or specialty in advising senior investors. 

In addition to educational outreach to regulated firms and registered personnel, FINRA has also 

increased our efforts to fight fraud and, to that end, established several programs to help root 

out bad actors and help consumers protect themselves. In early 2009, we created the Office of 

the Whistleblower, and later that year, also established the Office of Fraud Detection and 

Market Intelligence (OFDMI). Through this office, staff with expertise in fraud detection and 

investigation can provide a heightened review of potentially serious frauds. OFDMI's mission is 

to ensure that allegations of serious fraud received by FINRA in the form of complaints, 

regulatory filings and other sources are subjected to a heightened review. OFDMI serves as a 

centralized point of contact on fraud issues, within FINRA and externally with other regulators 

and the public. The creation of OFDMI has expedited fraud detection and investigation, by 

pursuing matters as far as possible and by referring cases that fall outside of FINRA's scope to 

the appropriate authorities. 

Investor Protection Campaign 

One of the major initiatives of the FINRA Foundation aims to reduce investor susceptibility to 

fraud. Launched in 2008, the Investor Protection Campaign (I PC) is an innovative, researchbased, multi-faceted effort intended to help investors understand how they might be susceptible 

to investment fraud and to replace risky investment behaviors with fraud detection and 

prevention behaviors. Armed with research around investment fraud victims and fraudster 

tactics, as well as the field-tested Outsmarting Investment Fraud curriculum and related 

resources, the program has achieved the following results to date: 

• public television distribution of the award-winning documentary, Trick$ of the Trade: 

Outsmarting Investment Fraud, with 760 airings on 172 public television stations in 76 

television markets across 31 states since September 2010, reaching an estimated 51 

million households of consumers age 50 and older; 

• in-person and direct-mail distribution of more than 100,000 DVD copies of the 

documentary and over 300,000 Fighting Fraud 101 brochures; 

3 
151 

• delivery of more than 640 presentations in conjunction with national, state and local 

partners that have reached more than 33,000 investors nationwide; 

• training of 40 percent of Better Business Bureau affiliates to deliver the curriculum in 

local communities; 

• "live" fraud prevention counseling to almost 28,000 investors through outbound calls 

from a network of Fraud Fighter Call Centers; and 

• creation of a Financial Fraud Research Center and release of a white paper that 

comprehensively examines what is currently known about retail financial fraud. 

The campaign builds upon FINRA Foundation-funded research unveiled in July 2006 that 

shattered the stereotypes of senior investment fraud victims, revealing a fraud victim profile that 

was counterintuitive in many respects. Instead of being isolated, frail and gullible, fraud victims 

tended to be married, college-educated males with above-average incomes and above-average 

levels of financial literacy. The research further identified the sophisticated and highly effective 

influence tactics that fraudsters use to carry out investment scams. These findings forced 

regulators and senior citizen advocates alike to rethink how best to approach the challenge of 

equipping older investors with the tools and information they need to thwart fraudsters touting 

investment scams. 

In 2007, the Foundation conducted extensive due diligence to develop a program to meet these 

challenges, coordinating closely with one of the lead social scientists on the 2006 study, Doug 

Shadel, director of AARP's Washington State office. Adopting best practices recommended by 

the Organization for Economic Co-operation and Development (see OECD, Examining 

Consumer Policy: A Report on Consumer Information Campaigns Conceming Scams 

(December 20, 2005», we structured the Investor Protection Campaign to focus less on 

shortterm, information-led "warning" strategies and more on a longer term, skills-based 

"educating" strategy backed by Significant research and resources. 

In 2008, the FINRA Foundation launched the Investor Protection Campaign, seeking to protect 

all investors, especially those over the age of 55, from investment fraud by helping them to 

recognize their vulnerability to financial fraud, to identify persuasion tactics and to take simple 

steps to reduce risky behaviors. The centerpiece of the campaign is a field-tested persuasion 

resistance curriculum, Outsmarting Investment Fraud, which we developed in consultation with 

4 
152 

an array of experts in psychology, marketing and fraud. Designed to be flexible (with half-hour 

and hour-long versions available), the curriculum typically features a moderated presentation 

with video clips and hands-on learning activities that covers some of the most common tactics 

employed by fraudsters: 

Phantom Riches-dangling the prospect of wealth or enticing investors with something 

they want but can't have. "These oil wells are guaranteed to produce $6,800 a month in 

income." 

• Source Credibility or Authority-building credibility and trust by claiming to be an expert. 

"I've been in the business for 20 years, hold the 'XYZ' credential and wouldn't offer an 

investment that doesn't make money for my clients." 

• Social Consensus-leading the target to believe that other savvy investors have already 

invested. "This is how 'Famous Person' got his or her start. I know it's a lot of money, but 

I'm in-and so is my mom and half her church. Everyone agrees it's worth every dime." 

• Reciprocity-manipulating human tendencies to return one favor with another, often 

used to prospect clients at free meal seminars and build a relationship. "I'll give you a 

break on my commission if you buy now-half off" or "You came to my seminar last 

week, let me come to your home to discuss more opportunities." 

• Scarcity-creating a false sense of urgency by claiming an offer is limited, either by time, 

quantity or audience. "There are only two units left, so I'd sign today if I were you" or 

"Only a select group of investors will be able to get in on this deal." 

The steps investors can take to avoid fraud and to separate fraudulent offers from legitimate 

opportunities boil down to two words: ask and check. We arm investors with questions to ask 

about both any investment they're considering and the individuals who tout it-and we show 

them where to turn to independently verify the answers they get. 

Our curriculum has been field-tested twice using treatment and control groups-first to 

determine the extent to which our workshops reduced susceptibility to fraudulent sales pitches, 

and then to assess both impact and persistence over time. In each instance, investors who had 

5 
153 

participated in one of our persuasion resistance workshops prior to being pitched on a new 

investment opportunity were half as likely to agree to receive materials about the deal compared 

with a control group (who had not yet been exposed to the campaign's messaging). 

In 2009, we produced an hour-long documentary, Trick$ of the Trade: Outsmarting Investment 

Fraud, modeled specifically after the Outsmarting Investment Fraud curriculum. American Public 

Television began distributing the documentary in September 2010 through public television 

stations nationwide and remains available for station airings through September of 2013. The 

show has received two Telly Awards (which honor the best local, regional and cable television 

commercials and programs, the finest video and film productions, and exemplary work created 

for the Web)-one for social issues and one under the how-to/instructional category. In 2010, 

Trick$ of the Trade was also recognized by Kiplinger's Personal Finance magazine as a "Best of 

Everything 2010: Best Personal-Finance Resources: 

Since launching the campaign, we have endeavored to de-stigmatize victim hood and to engage 

multiple partners and the media to help spread key messages. National partners include the 

Securities and Exchange Commission, the AARP Foundation, the Council of Better Business 

Bureaus and the National White Collar Crime Center, among others. Partners at the local level 

include state securities regulators, state AARP offices and various other government, non-profit 

and grassroots organizations, including crime prevention networks. 

The ongoing project comprises three primary elements: 

1) Research Facilitation: adding to and beginning to organize the body of knowledge 

around investment fraud in order to better equip fraud detection and prevention 

professionals with evidence-based information and resources; 

2) Educational Resources & Programs: developing and testing interventions and resources 

that help investors avoid fraud; and 

3) Outreach Partnerships & Public Awareness: leveraging partnerships to expand the reach 

of the project and refining outreach strategies to maximize the number of investors 

positively reached with the field-tested curriculum and research-based messages. 

With respect to the research element of the campaign, the FINRA Foundation partnered with the 

Stanford Center on Longevity to launch the Financial Fraud Research Center in August 2011. 

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The Center's focus is individual consumer financial fraud-particularly fraud achieved using 

deception, including phony lottery awards, investment scams and online phishing schemes. The 

Center seeks to facilitate understanding, prevention and detection of financial fraud by compiling 

and making available information about research across a range of disciplines (from psychology 

to criminology to marketing and more), connecting research to practical policy and fraud-fighting 

initiatives and facilitating research by providing seed funding and connecting funding 

opportunities to interested researchers. More information is available at the Center's website at 

fraudresearchcenter.org. 

Understanding Professional Designations Database 

As explained more fully in Regulatory Notice 11-52, FINRA rules require brokerage firms to 

have, at a minimum, supervisory procedures in place that are reasonably designed to prevent 

their registered representatives from using a senior designation in a manner that is unethical or 

misleading. Firms and registered representatives are also prohibited from making false, 

exaggerated, unwarranted or misleading statements or claims in communications with the 

public-and this prohibition includes referencing nonexistent or self-conferred degrees or 

deSignations or referencing legitimate degrees or designations in a misleading manner. 

To help investors make sense of the dozens of credentials securities industry professional might 

use, FINRA created a Professional DeSignations Tool, which currently provides objective data 

on more than 140 designations and credentials. The tool allows investors to better understand 

what education and experience requirements are necessary for a designation-and to 

determine whether the granting organization mandates continuing education, offers a public 

disciplinary process, provides a means to check a professional's status and otherwise ensures 

that a professional designation is more than just a string of letters. The tool is available on 

FINRA's website at www.finra.org/designations. 

Conclusion 

We appreciate the opportunity to submit this statement for the record of the Committee's 

hearing on preventing elder financial abuse. FINRA and the FINRA Investor Education 

Foundation are committed to expanding the knowledge and confidence of all Americans wishing 

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to build a more secure financial future through saving and investing, and we share your interest 

in protecting those savings and investments. 

8 
156 

To: Senator Herb Kohl (D-WI), Chair, Special Committee on Aging 

Elaine Roberts Musser 11 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

From: Elaine Roberts Musser, Volunteer Attorney, Yolo County Multidisciplinary Team 

Date: November 19, 2012 

Inre: America's Invisible Epidemic: Preventing Elder Financial Abuse, 11 a.m., November 15, 2012 

I would like to submit the following statement, to be included in the above referenced hearing record. It 

was with great interest that I listened to this informative hearing and read the accompanying November 

2012 GAO Report to Congressional Requesters entitled "National Strategy Needed to Effectively Combat 

Elder Financial Exploitation" (GAO-B-llO). 

I wholeheartedly concur with the Special Committee on Aging's conclusion that more consumer 

education is needed on the subject of financial elder abuse. As the GAO Report noted "Experts and 

federal, state, and local officials told us that older odults need more information about what constitutes 

elder financiol exploitation in order to know how to avoid it." However, 1 also believe that an entire 

facet of financial elder abuse Is not being addressed: the practice of some legitimate businesses 

perpetrating fraud upon our senior citizens. Obviously not every legitimate business engages in the 

sort of dreadful conduct 1 am about to describe, but enough do that it should be of grave concern to the 

Special Committee on Aging. 

Allow me to give ten specific examples, a small sampling of cases 1 have encountered in my law practice 

and as a volunteer member of the Yolo County Multidisciplinary Team in the state of California. I will 

also give some suggestions, depending on the specific circumstance, about what sort of solutions might 

have prevented such reprehensible behavior on the part of some legitimate business. 

Case I. - Banks A retired school teacher's elderly husband walked into his bank one morning. A teller 

steered him towards an investment advisor ensconced in a corner of the bank. This investment advisor 

was employed by a subsidiary of the bank. Apparently the bank had discovered the retired school 

teacher, Mrs. A, over the years had accumulated $250,000 in savings, which currently resided at a local 

credit union. Both Mrs. A and her husband were soon convinced by the investment advisor to transfer 

the entire $250,000 from the credit union into the bank subsidiary's aggressive investment portfolio. A 

sign in the bank window assured the couple "all accounts" were FDIC insured, even though buried in the 

wordy prospectus was a disclaimer to the contrary for investment accounts. 

Very soon the investment account began rapidly losing its value. Mrs. A was not paying close attention, 

because she was nursing her father through cancer. Upon her father's demise, she finally took notice of 

the worth of her account, now reduced to a paltry $70,000. She tried to contact the investment advisor, 

but he refused to return her frantic phone calls. Nor was the bank particularly helpful either. It was at 

this point that she sought help from me, a retired attorney volunteering my time and expertise at a 

senior legal hotline. 

Upon investigation, I discovered Mrs. A had been placed in an overly risky investment account 

completely unsuitable to her financial situation and experience, contrary to state and federal law. It was 

also apparent she would be required, unbeknownst to her, to settle any dispute through arbitration. 

Eventually I was able to obtain for her an experienced attorney knowledgeable in financial arbitration, 
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Elaine Roberts Musser 12 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

who took the case pro bono. My client was only required to put up a $5000 deposit for the arbitration 

venue, and the attorney paid for everything else himself. The bank offered to settle the dispute for a 

measly $2,000. The case went to arbitration, and an award to my client was made for an undisclosed 

amount. My client was quite satisfied with the result. 

Suggested prevention strategies: 

• Banks should not be permitted to steer wealthy customers toward investment advisors renting 

space inside their banks - it is a clear conflict of interest, particularly if the investment advisor 

works for a subsidiary of the bank. 

Nor should banks be allowed to rent out space inside their bank branches to investment 

advisors - to prevent confusion about whether investment accounts are FDIC insured or not. 

Case II. - Financial Institutions Mr. B was an elderly gentleman farmer, who had lived in his home with 

his wife for over thirty years. It was a lovely house with extensive and beautiful landscaping. However, 

he had accumulated $300,000 in farming debt over the years. A slick representative from a financial 

institution convinced Mr. B to unwisely transform his unsecured farming debt into collateralized debt, 

with the house put up as collateral. The collateralized debt was in the form of an option pay ARM, with 

the interest rate listed as monthly at 1Y,%, which translates into 18% per year. Understandably my 

client assumed the interest rate he saw on the paperwork was per year, since that is what is required by 

law. As the interest rate adjusted upwards under the ARM, from about $1000 per month to about 

$3000 per month in three years, not surprisingly Mr. B was ultimately no longer able to make his house 

payments. Foreclosure was the result. Yet had Mr. B sought legal advice before he agreed to such a bad 

bargain, he would have realized the $300,000 debt could have been discharged in bankruptcy, with his 

residence left intact. No matter how many agencies I contacted, not one seemed particularly interested 

in the fact that the bank had illegally listed the interest rate per month, instead of per year as required. 

Suggested prevention strategies: 

A financial institution should not be permitted to cozen clients into collateralizing unsecured 

debt, without offering some sort of independent counseling first. 

• Any financial institution caught listing interest rates improperly should have to pay a hefty fine, 

and the misleading contract should be declared null and void. 

case III. - Magazine Companies An elderly Mr. C had always taken care of the finances in the family, 

but began suffering from dementia. As magazine subscription renewals came in, he would automatically 

write out a check to cover it, even though he had already paid the month prior. The magazine 

companies caught on to the fact that they had a sucker on the hook - and began sending the man 

renewal notices every single month, along with books he never ordered demanding payment. Before 

his wife caught on to the scheme, Mr. C had been cheated out of approximately $800 in one year as a 

result of this type of scamming. He had about 10 magazine subscriptions each paid up for the next 

twenty years. Books were paid for that he never ordered, because the companies threatened to turn his 

accounts over to a collection agency. As their legal representative and advocate, it took me over a year 

to convince this couple the wife needed to assume responsibility for the finances on behalf of her 

husband and herself. The misguided woman insisted she didn't want to rob her husband of his dignity. 

"But how dignified was it to keep allowing him to be conned out of his and your money?" was the 

question I posed to her, reminding the older woman their estate was being decimated by unscrupulous 
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Elaine Roberts Musser 13 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

businesses. At long last she began taking my advice and sorted through the mail to weed out magazine 

renewal notices and unordered books before giving it to her husband, and paying all the bills herself. 

Suggested prevention strategies: 

• Make it against the law for magazine companies to send out renewal notices more than three 

months in advance of the expiration date. 

• Educate the public through the postal service that any unordered books should be left 

unopened in their package and returned to the post office as "delivery refused". 

Case IV. - Car Rental Companies The elderly Ms. D received what she thought was a "rebate" check in 

the mail for $15. She could not remember having purchased anything that would have resulted in a 

rebate check being sent to her. Ready to cash it, she wisely decided to look at the check more closely, 

turning it over and reading anything that appeared on the reverse side. Sure enough, in tiny print on the 

back of the check was a single paragraph. The language made it clear that if the check were cashed, the 

endorser of the check would have agreed to belong to some sort of travel club - and be automatically 

charged a fee every month on their credit card. The credit card information had apparently been 

obtained through a rental car company Ms. D had used some months ago, when she had to take her 

own automobile into the shop for repairs. To opt out of the travel club, once the check was cashed, the 

endorser had to use a telephone number only found on the back of the check. Worse yet, the monthly 

fee was subject to increase at any time and for any amount. Fortunately Ms. D never cashed the checknor did she ever use that rental car company again. 

Suggested prevention strategies: 

• A rental car company or any other type of business should never be able to give out credit card 

information to any other individual or businesses. 

• Any "club" where membership is being obtained through the lure of cashing a check, should be 

"opt - in" only. If someone cashes the check, s/he must affirmatively check off a box to agree to 

take the service. 

• Never should a consumer contract be permitted, to join a club indefinitely through the cashing 

of an enticement check, where the price of something can go up without the consumer's 

permission for any reason at any time once the consumer endorses the check. 

Case V. - Tax Accountants and Attorneys Mr. and Mrs. E, an elderly couple living in California, received 

an alarming notice through an attorney, referred to them by their tax accountant. It stated the Mr. and 

Mrs. E were involved in a criminal Ponzi scheme, that had once been a legitimate oil well investment in 

Oklahoma 25 years ago. Supposedly the married pair now owed $15,000 to a federal bankruptcy court 

involved in the case, even though they had lost $25,000 on their original investment. It made no sense. 

I started investigating the case. To my surprise, I discovered that indeed if an investment eventually 

turns out to be a Ponzi scheme, an investor may very well be on the hook and owe the company's 

bankruptcy trustee, depending on state law, even if the investor lost money in the deal. However, with 

a little further digging, I discovered the tax accountant and attorney were partners in crime, inflating the 

amount owed from only $5000 to triple that. I assume my clients would have been expected to pay the 

$15,000 to the attorney, the attorney would have sent on $5,000 to the bankruptcy trustee, and split 

the other $10,000 with the tax accountant. From my research it appeared these two con artists were 

bilking about 60 investors in the same fashion. I immediately notified the attorney handling the 

bankruptcy, and the federal offiCial in charge of the federal bankruptcy court. Neither were the least bit 
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Elaine Roberts Musser 14 

Attorney at law 

P.O. Box 2366 

Davis, CA 95617 

interested in the fraud being perpetrated on the other investors. The Securities and Exchange 

Commission wasn't particularly interested either. My clients paid only the $5000 they owed, directly to 

the attorney handling the bankruptcy. I suspect the other investors were duped into paying triple what 

they owed. 

Suggested prevention strategies: 

Federal and state officials should pay attention to any reports of investment fraud; and be 

required to investigate; and disbar any attorney/revoke the license of any accountant found to 

have perpetrated fraud on a bankruptcy court. 

• A bankruptcy attorney that learns of potential fraud in a bankruptcy case should be required to 

immediately notify federal and state officials, or be disbarred. 

Case VI. - Health Insurance Agencies Mr. F, a Spanish speaking elderly gentleman, was cold-called by a 

Russian speaking salesman selling prescription drug insurance targeted towards dual eligibles (those 

eligible for both Medicare and Medicaid). The promise was that there would be no health insurance 

premiums to pay, and the prescription drugs would be cheaper under the new policy. The insurance 

agent was actually foolish enough to put his sham promises in writing. Mr. F bought the bogus claim of 

no insurance premiums hook, line and sinker, changing his Medicare Part D plan to the one falsely 

advertised by the Russian speaking salesman. As it turned out, my client did have to pay a monthly 

health insurance premium higher than the original one with his previous plan. His prescription drugs 

were, in fact, far greater in expense under the new policy. His insulin actually cost more than if he had 

purchased it over the counter without any health insurance! It was at this point Mr. F contacted me in 

desperation for assistance. 

By this time my client had run out of money to pay for his medications, having gone without his drugs 

for three days. In a wheelchair, the frail elder was diabetic with Parkinson's Disease. He had been 

placed in a life threatening situation by an unscrupulous insurance agent who had telephoned him out 

of the clear blue and told him a load of lies, exploiting the language difference between the two. I 

immediately contacted the insurance company as well as Medicare. Mr. F was permitted to change 

back to his original Medicare Part D insurance coverage - because it was determined by Medicare that 

my client had been scammed by the Russian speaking insurance agent. However it took nearly six 

months to completely straighten out the mess, with tons of bureaucratic red tape to be dealt with, to 

achieve a satisfactory outcome. As far as I know, the insurance company in question is still in business. 

Suggested prevention strategies: 

• It is my understanding the federal government is addressing the issue of dual eligibles being 

targeted by health insurance companies acting in bad faith, who try to get the dual eligibles to 

switch health insurance plans not in their best interests, with fake promises of cheaper 

premiums and prescriptions. 

Case VII. - Time Share Companies A time share company contacted an elderly Mr. G, suffering from 

Alzheimer's Disease, via telephone in the middle of the night. He was talked into purchasing a time 

share, his wife completely unaware of what had transpired. Mrs. G ultimately decided to accept the 

purchase, not fully understanding what she was letting herself or her husband in for. The couple used 

the time share for a short amount of time, about two years. It was not long before they realized their 

health would not permit them to travel any distance to take advantage of the time share purchase. Nor 
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Elaine Roberts Musser 15 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

could they afford the ever rising monthly fees, which were becoming prohibitively expensive on their 

limited fixed incomes. 

When the couple tried to sell their time share, they had no luck. A questionable company was hired to 

market the time share, to the tune of about $6000, but not unsurprisingly there were no takers. Yet the 

two were still responsible for paying the monthly fees until sale of the time share to a purchaser. I tried 

to assist the couple, but to no avail. My research showed time shares are almost impossible to sell. 

Companies that promise to market a time share charge enormous fees knowing full well there is almost 

no chance of success. Because the couple had actually chosen to use the time share for a couple of 

years, I could not use a lack of capacity defense in regard to Mr. 6's affliction with Alzheimer's Disease. 

It appeared the couple was stuck with their purchase and on the hook for monthly fees for eternity. 

Suggested prevention strategies: 

• The abuses in the time share industry are widely known by both federal and state officials. Yet 

there doesn't seem to be any serious attempt to clean up a corrupt industry. 

Every time share purchaser should be given a warning sheet to sign, listing all the potential 

problems with time shares, prior to purchase. 

Case VIII. - Antiques Dealers Mr. H, an elderly gentleman with a hear:t condition, took some valuable 

antiques to a dealer for sale on consignment in an antiques mall. After a time, when he heard not a 

word, the worried man contacted the dealer. She kept putting him off, saying nothing had sold yet, but 

assured him it would be bought soon. After approximately three months had elapsed, Mr. H telephoned 

the dealer again, making it clear he was going to take back his furniture and sell it elsewhere since it was 

not being purchased. When the frustrated Mr. H went to pick up his merchandise, they were loading 

some of the pieces on a truck. He demanded to know what was going on. The dealer told Mr. H that 

part of his consignment had been sold, but far below the agreed upon price. When Mr. H raised a 

justified objection, the dealer handed him a small amount of cash, telling him there was nothing he 

could do about the sale or the low price - insisting it was a "done deal". Unfortunately Mr. H could feel 

a potential heart attack coming on, because of the severe stress he was being placed under. So he 

departed out of necessity, returning home nearly empty-handed. 

Once I became involved in the case in my capacity as a volunteer attorney at a senior legal hotline, I took 

careful notes, obtaining written statements from all concerned. To his surprise and chagrin, my client 

spotted one of his pieces of furniture for sale in another antiques store, at a highly inflated price. He 

knew he had been flim-flammed by an unscrupulous antiques dealer. I urged him to take the matter to 

small claims court, where attorneys are not permitted and he could argue his own case. He was advised 

to ask for the full jurisdictional amount in recompense. My client did just that, and won his case hands 

down. The other side appealed. So the matter was kicked up to the Superior Court, necessitating my 

client to hire an attorney. I found him a lawyer willing to take his case for a nominal fee. I drove two 

hours in the rain to testify on his behalf. Mr. H again won his case, and was eventually able to collect 

the full amount of his judgment. Very shortly thereafter and not surprisingly, the dealer went out of 

business - the entire antiques mall closed down. 

Suggested prevention strategies: 

• If a plaintiff wins a case in small claims court, the opposing side should only be able to appeal to 

a different small claims judge. It is not fair to allow an appeal that kicks the matter up to a 
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Elaine Roberts Musser \6 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

higher court, where attorneys can get involved. The plaintiff may not have the funds to pay for 

a lawyer, if the other side decides to obtain legal counsel to argue their case in the higher court. 

Case IX •• Landlords A slumlord of low income housing refused to make appropriate repairs to the 

elderly Mr. I's duplex, despite constant complaints to the landlord and to Housing and Urban 

Development (HUD), the federal housing agency. Water seeped up from the foundation, soaking the 

rug, and came in underneath the window sills. Rats scampered throughout the building. The heat did 

not work properly, so that Mr. I spent many nights sleeping in his small truck or at a friend's house. 

One day he smelled natural gas, and contacted me in a panic for assistance, to determine what he 

should do. I instructed him to immediately contact the utility company and have them come out. Mr. I 

made the call, but was told since he was behind on his monthly gas and electric bills, the company 

would not send anyone. Because Mr. I lived in a duplex, I told him to have his neighbor ask the utility 

company to send someone out to check for gas leaks. 

The utility company did send a representative later that day, who found a hole the size of a golf ball in 

the gas heater. The representative said that the entire duplex could have gone up in an explosion at any 

time. Repairs to the gas heater were made posthaste, right there on the spot. At that point, I 

contacted Housing and Urban Development, to lodge a strong complaint against the landlord. 

Meanwhile, my client was given permission to find other low income housing to live in. Eventually the 

landlord was forced to clean up all her low income properties, but only after months of persistent 

objections on my part. 

Suggested prevention strategies: 

• Tenant complaints in low income housing need to be taken seriously, and there should be a 

requirement that any such complaints be investigated, and acted upon if well founded. 

• The landlord should be made to make necessary repairs to ensure low income housing is 

habitable, or have their ability to provide low income housing revoked, punishable with severe 

penalties. 

Case X. - Management Companies and Attorneys for Homeowner Associations Mrs. J, an elderly 

widow with multiple health problems, called the management company of her homeowner association, 

when she smelled smoke coming from a malfunctioning light in the common area. She was fined $200 

for having called management instead of the local fire department. When she refused to pay the 

outrageous fine at my direction, the homeowner association began fining her for having a wilted plant 

on her front porch; a vine growing through her fence; for speaking out against the board to a neighbor, 

as a board member walked by. Once the penalties mounted ever higher, and Mrs. J refused to pay the 

unreasonable fines upon my advice, the homeowners association spitefully and illegally instructed the 

management company to conger up an utterly bogus bill for past assessments due of $16,000. 

Immediately, the management company proceeded to turn the matter over to the attorney 

representing the homeowner association. Suddenly my client's home was foreclosed on, by a collection 

agency that was a subsidiary of the homeowner association attorney's law firm. The two entities, the 

law firm and the collection agency, were essentially one and the same, collecting late fees and collection 

charges that mushroomed dramatically in a few short months. The management company also charged 

its own fees in the foreclosure process. I strongly advised my client to take the matter to mediation. A 

few weeks before I was able to arrange for dispute resolution, my client died of a massive heart attack -
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Elaine Roberts Musser 17 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

brought on by the extreme stress she had been placed under by the untoward behavior of the 

homeowners association. I tried very hard to get her estate to file a lawsuit against the homeowners 

association for their bad faith conduct, but my strong suggestion was not acted upon. However, the 

homeowners association was never able to collect on the phony assessments, late fees or collection 

charges from the estate. 

I appeared on KTVU Oakland television, which exposed this foreclosure scam. It highlighted the 

unsavory practice of the attorney for the homeowners association and the collection agency being 

essentially one in the same, making large amounts of money off the foreclosure process in a clear 

conflict of interest. In many cases, the monthly assessment check is put in a drawer, a claim of 

nonpayment made, and the foreclosure process begun - to amass ever escalating late fees and 

collection charges. In another case involving the very same management company and law firm, but for 

a different homeowners association, another client of mine was foreclosed on. Her check had been 

placed in a drawer, a claim of nonpayment made, and late fees and collection charges piled on. A 

supposed debt of approximately $500 mounted to ove~ $6000 in two short months. My client took the 

matter to arbitration, which cost her a total of $12,000, but she ran out of money to be able to continue 

the fight into the courtroom. Sadly the unfortunate woman had to make the hard decision to pay all 

that was asked, rather than risk foreclosure on her home - no matter how unjust the late fees and 

collection charges were. 

Suggested prevention strategies: 

All assessments must be fair and reasonable. Every small claims court should have jurisdiction 

to determine whether assessments imposed by a homeowners association are fair and 

reasonable. 

Collection agencies hired by homeowners associations to carry out foreclosures should not be 

permitted to be in any way affiliated with the attorneys representing homeowners associations. 

• late fees and collection costs in foreclosure should be fair and reasonable, and limited to no 

more than 20% of what is owed. Every small claims court should have jurisdiction to determine 

whether late fees and collection costs in foreclosure imposed by a homeowners association are 

fair and reasonable. 

• A management company should not be able to collect any fees on the foreclosure process. 

Freedom of speech should prevail in homeowner associations, so that fines for speaking out 

against the board are prohibited. 

Any fines imposed in a homeowners association for failing to follow governing documents must 

be fair and reasonable and not frivolous. Every small claims court should have jurisdiction to 

determine whether a fine imposed by a homeowners association is fair and reasonable. 

• Any homeowner association board member who acts in bad faith and permits unfair or 

unreasonable assessments, fines, late fees or collection charges should be held personally liable 

to the homeowner for any amount deemed by the courts to be unreasonable. 

A homeowner should be able to make monthly payments directly to the homeowners 

association if management is not receiving payment for whatever reason. 

In Yolo County, California, some years ago we formed the Triad Task Force, an action arm of the Yolo 

County Commission on Aging & Adult Services. I decided to set it up after listening to a talk on financial 

elder abuse given by a member of your panel Paul Greenwood, Deputy District Attorney, Head of the 

Elder Abuse Unit, Family Protective Services, San Diego, CA. The Yolo County Triad Task Force has 
163 

Elaine Roberts Musser Is 

Attorney at Law 

P.O. Box 2366 

Davis, CA 95617 

developed two fraud DVDs, in partnership with the Yolo County District Attorney's Office and University 

of CA Davis Media and Computer Lab. The DVDs are used as an adjunct to seminars on consumer and 

cyber fraud we give throughout the county. The idea is to reach out to senior citizens before they are 

scammed, educating them on what red flags to look for, in an effort to prevent financial elder abuse. 

This sort of critical education needs to take place at the local level in particular, where seniors reside 

within their communities. 

I was heartened to see there is a recognition that an effort to improve the financial literacy of senior 

citizens needs to be made, according to the GAO Report: "Coordination among federal agencies is also a 

feature of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which established CFPB, 

requiring it to coordinate its consumer protection efforts of older adults with other federal agencies. 

CFPB's Office for Older Americans is charged with facilitating the financial literacy of seniors on 

protection from unfair. deceptive, and abusive practices and on current and future financial choices." 

Nevertheless District Attorneys, Adult Protective Services and law enforcement require the necessary 

funding to carry out this educational function, a point also noted in the GAO Report: "Experts and 

federal, state, and local officials told us that older adults need more information about what constitutes 

elder financial exploitation in order to know how to avoid it. However, APS and law enforcement officials 

told us that it is difficult for them to reach many older adults with this message and that they have little 

funding to promote public awareness. For example, in one Cali/ornia county offiCials reported that due to 

budget cuts, they had lost many positions that involved educating the public about elder financial 

exploitation. " 

Another crucial point noted in the GAO Report is that financial elder abuse is often treated as a civil 

matter rather than a criminal one: "In addition, we were told that some prosecutors and judges are 

reluctant to take on cases of suspected elder financial explaitation because of competing priorities and 

limited resources, a continuing belief that elder financial exploitation is primarilv a civil issue, or a viewaf 

older adult victims as unreliable witnesses". Financial elder abuse needs to be treated as a criminal 

matter if there is any hope of putting a stop to it. Civil court is too expensive and too traumatic an 

option for most senior citizens to avail themselves of. They need the assistance as well as the full force 

and effect of the criminal justice system to protect them. 

In Yolo County, representatives from the various agencies meet in a multidisciplinary team format to 

address the issues of seniors in crisis. It is the perfect venue to discuss financial elder abuse. But law 

enforcement is so over-extended, the appropriate representatives from the District Attorney and police 

cannot get permisSion to attend these meetings. This problem was noted in the GAO Report: "Although 

multidisciplinary groups responding to elder financial exploitation already exist in each of the four states 

we visited and elsewhere, forming and sustaining these groups continues to be challenging. according to 

law enforcement officials in one state we visited gnd experts. Busy schedules and competing priorities 

make it difficult for some participants to attend meetings regularlv. and a group's focus infiuences how 

extensively members are willing to participate. For example, in one location offiCials told us that when 

the primary focus of their group shifted fram prosecuting cases to providing services, participation by law 

enforcement officials declined." The federal government needs to support these multidisciplinary 

team efforts In every way possible. 

However, federal agencies also need to be more responsive to state and local law enforcement and legal 

advocates that seek assistance, as noted in the GAO Report: "For example, a law enforcement official 
164 

Elaine Roberts Musser 19 

Attorney at law 

P.O. Box 2366 

Davis, CA 95617 

from California described a case of widespread interstate check froud, expressing frustration with federal 

agencies that wauld not provide any support when he reguested it. Federal afficials. on the ather hand. 

told us that they cannat take all cases referred to them by state and local law enforcement and that they 

must prioritize their caseload to make the best use of their limited resources. Justice and FTC offiCials 

said they tend ta focus on larger cases in which many victims were affected or a significant amount of 

money was lost, and Justice's U.S. Attorneys also apply regional priorities, such as the vulnerability 

(including age) of the victim, when determining which cases to take." 

Banks themselves are certainly an important partner in combating financial elder abuse, as indicated in 

the GAO Report: "According to state and local officials. bonks are important partners in combating elder 

financial exploitation because they are well-positioned to recognize. report. and provide evidence in 

these cases. Indeed, frontline bank staff are able to observe elder financial exploitation firsthand. For 

example, a bank teller who sees an older adult regularly is likely to notice if that individual is 

accompanied by someone new and seems pressured to withdraw money or if the older adult suddenly 

begins ta wire large sums Of money internationally." In California, we have a mandatory reporting law 

for financial elder abuse, that Includes banks as mandated reporters. Banks have been instrumental 

and crucial in providing training on financial elder abuse and spotting the financial abuse when it is 

occurring. 

And lastly I wholeheartedly concur with the GAO Report's final conclusion: "Elder financial exploitation is 

a multi-faceted problem spanning social service, criminal justice and consumer protection systems of 

government. As a result, combating it is challenging and reguires actian on the part of not only many 

state and local agencies. but also multiple agencies at the federal level. Each of the seven federal 

agencies we reviewed is working to solve this problem in ways that are cansistent with its awn mission. 

However. the problem is large and growing. It calls for a more cohesive and deliberate approach 

government wide that. at a minimum. identifies gaps in efforts nationwide. ensures that federal 

resources are effectivelv allocated. establishes federal agency responsibilities. and holds agencies 

accountable for meeting them." 

I commend the Special Committee on Aging and its Chairman, Senator Herb Kohl (D-WI), for taking on 

the difficult task of financial elder abuse prevention. Financial elder abuse is an epidemic of criminal 

activity that is sweeping our nation. If we don't do something about this spreading scourge now, it will 

wreak irreparable havoc on our elder citizens' health and financial well being and on our nation's 

economy. I hope I have helped in highlighting another facet of financial elder abuse - legitimate 

businesses that may stoop to scamming senior citizens. If I can be of any further assistance or should 

you have any questions or concerns, please do not hesitate to contact me. 
165 

WRITTEN TESTIMONY OF 

DEPUTY CHIEF POSTAL INSPECTOR SHAWN S. TILLER 

SUBMITTED TO THE SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE 

HEARING ON 

PREVENTING ELDER FINANCIAL ABUSE 

NOVEMBER 15, 2012 

I want to thank the Senate Special Committee on Aging for the opportunity to provide written 

testimony on the financial exploitation of older Americans. The U.S. Postal Inspection Service has 

developed a strategy to combat elder fraud committed through the mail. These are scams 

perpetrated mostly by strangers, versus the kinds of frauds committed by family members or 

caregivers. In many cases, the perpetrators are in other countries. Our strategy has three main 

components: (1) building partnerships; (2) training law enforcement on the state and local level; 

and (3) raising public awareness. 

The U.S. Postal Inspection Service, the law enforcement and security arm of the U.S. Postal 

Service, is committed to protecting all Americans from fraud, but especially the elderly who are 

targeted or disproportionately victimized by schemes such as lottery fraud. Our investigations 

show that most lottery fraud victims are between 60 and 80 years old, many even older. 1 No 

legitimate lottery requires the payment of fees or customs duties upfront to collect your winnings. 

So, why are the elderly so easily duped? In 2009, the MRP Foundation sponsored a study that 

sent trained geriatric social workers into the homes of elderly lottery fraud victims. The average 

age of these subjects was 77. Nearly three-quarters of the victims interviewed were assessed as 

having mild or moderate cognitive impairment.2 Given the older age ofthe victims, one might 

assume the rates of cognitive impairment in this study are normal. Recent national studies of 

elderly Americans, however, found that only 21 percent of individuals between 71 and 79 years of 

age and 53 percent of those between 80 and 89 have cognitive impairment? Victims of lottery 

fraud have more cognitive impairment than other individuals in their age range. 

Scientists have recently pinpOinted the part of the brain associated with gullibility and found that 

people with age-related damage to that area tend to believe misleading ads.4 In short, they lose 

the ability to detect deceit. So, when they receive a solicitation through the mail or over the 

phone that says, 'You've won!" they believe it. They just don't get the lie. In fact, the ability to 

spot a lie is one orflle first things to go. Even in the early stages of mental impairment, a person 

could function normally in all other areas: live independently, pay their bills, drive to the grocery 

store, and meet with friends. Meanwhile, their vulnerability to con artists is quietly growing. 

Unobserved, unnoticed, except by the scammers. 

1 Based on a survey of USPIS fraud team leaders and investigators, May 5, 2012. 

2 AARP Foundation, 2009, pilot study to determine potential levels of cognitive impairment amon9 lottery 

victims. 

3 B. Plassman et ai, "Prevalence of Cognitive Impairment without Dementia in the United States,' Annals of 

Internal Medicine, 148 (2008), No. 6:427-434 

4 University of Iowa researCh, published 2012 in a special issue of Frontiers of Neuroscience; authors: 

Daniel Tranel, Erik Asp, Kenneth Manzel, Bryan Koestner, Catherine Cole. Contact Richard Lewis, 

University Communication and Marketing, 319-384-0012. 

University of California, Dept of Neurology: Comprehension of insincare communication in 

neurodegenerative disease: lies, sarcasm and theory of mind. Authors: Shany-Ur, T; Poorzand, P; 

Grossman, SN; Growdon, ME; Jang, JY; Ketelle, RS; Miller, BL; Rankin, KP. 2011. 
166 

Despite efforts to date, the threat of elder fraud remains very real, whether it takes place through 

the mail, on the phone or over the Intemet, and whether it is carried out by scam artists operating 

within the U.S. or elsewhere. Victims, however, are often reluctant to come forward and the 

suspects operate, more and more, from outside the United States. 

In 2009, Postal Inspectors initiated an investigation into a lottery fraud. All the victims in this 

ongoing case are older Americans (70 years or older). Postal Inspectors found that the operators 

of the fraud illegally purchased a list containing the names and addresses of older Americans.5 

They then contacted persons on the list by phone or mail, saying they had won a lottery and 

instructing them to wire transfer or mail a processing fee so the prize money could be released. 

The victims' payments went to co-conspirators operating within the U.S. or, in some cases, 

directly to the main suspects in Jamaica. 

In this case, the scheme was first reported to USPIS by local police in New Jersey. As the 

investigation progressed, Postal Inspectors teamed with two other federal agencies, the IRS and 

DHS, and authorities in Jamaica to help conduct surveillance and execute search warrants. To 

date, some suspects have been identified and charged; a few are cooperating. We leamed, for 

example, that the same lead list purchased by the Jamaican operatives was also purchased by 

criminals in Costa Rica, Canada, Panama and Russia. Even though we are a federal law 

enforcement agency, and even with the cooperation of other agencies and international 

authorities, we just can't arrest our way out of the problem. 

Our strategy, by necessity, includes other means to stop these crimes. We rely on our 

counterparts here and abroad to identify and intercept fraudulent solicitations before they enter 

the U.S. mail stream and ultimately reach the mailboxes of our aging parents, grandparents and 

other loved ones. We've enlisted the help of postal employees who deliver mail and work at retail 

counters to look for the tell-tale signs of scams targeting the elderty through the mail. We work 

with fraud practitioners throughout all levels of government and within non-governmental 

organizations to raise awareness and change the behaviors that give rise to victimization. Our 

success depends heavily on a team effort. We are reaching out now to AARP and other 

stakeholders, especially the Department of Justice, who partiCipate in the HHS-Ied Elder Justice 

Coordinating CounCil, and invite them to work alongside us. 

Prevention that works 

The U.S. Postal Inspection Service, upon consultation with Dr. Doug Shadel, Director AARP 

Washington State,6 offers these tips to older Americans: 1) learn to identify the tactics fraudsters 

use; 2) verify the registration status of investment brokers, lottery operators and charities before 

you do business with them or send money; and 3) reduce your exposure to sales pitches. 

Learn the Tactics Fraudsters Use: Studies conducted by Stanford University (2010)7 and the 

Department of Justice and AARP (2003)8 found that peer-to-peer counseling, even counseling 

provided through a call-center, resulted in a significant reduction in a person's tendency to fall for 

a fraudulent sales pitch. In a Similar study, older Americans participating in an investment fraud 

workshop (developed by AARP and the FINRA Investor Education Foundation) were better 

5 Postal Inspectors have yet to determine the source of the list purchased by the fraud operators. 

6 Doug Shadel is the state director for AARP Washington and previously served as a fraud investigator and 

special assistant to the attorney general for the Washington state Attorney General's office. He is a 

nationally recognized expert on financial fraud and the author of Outsmarting the Scam Artist, published 

2012, by John Wiley and Sons Inc., Hoboken, NJ. 

7 Menkin, Scheibe, Shadel, Ross, Deevy and Carstensen, "Forewarned, forearmed? Effects of warning 

messages on rejection of fraudulent telemarketing pitches.' Poster presentation at Gerontological Society of 

America Annual Meeting, New Orleans LA (November 2010). 

8 AARP, "Off the hook: Reducing partiCipation in telemarketing fraud." 

2 
167 

equipped to resist fraudulent offers after completing the workshop.9 In both models, participants 

leamed how to spot fraud from a safe distance. Hyped-up offers, using fearto induce a quick 

decision, asking lots of personal questions, and offers of free gifts or lunches are all waming 

signs. Knowing the waming signs in advance increases resistance to shady offers. 

Verify Whom You're Dealing WIth: Never make a decision at the time of the sales pitch and get 

everything In writing. Check the complaint history of the organization with the Better Business 

Bureau, attomey general's office for your state or another relevant govemment agency. Ask for 

and verify registration and licensing infonnation before proceeding. It does not guarantee that 

you will avoid all problems, but it will greatly reduce the chance the offer is a scam. 

Reduce Exposure to Sales Pitches: Persons who expose themselves to sales situations, even 

legitimate ones, are more likely to be victimized by fraud. Sign up for the Do Not Call Registry by 

calling 1-888-5-0PTOUT (1-800-567-8688) or online at www.donotcall.gov. It can help reduce 

telemarketing calls to your home. Exceptions are businesses with which you have a relationship, 

charities and political organizations. Get a non-published number and install an answering 

machine and caller 10 to screen calls. Record an outgoing message that infonns callers you do 

not accept SOlicitations and to place this number on their do-not-caillist. And finally, develop a 

one- or two-sentence refusal script and put it by the phone. An example would be: "I'm sorry. 

This is not a good time. Thank you for calling: 

Opt out of unsolicited commercial mail offers by contacting the Direct Marketing Association's 

(DMA) Mail Preference Service online by visiting www.the-dma.ora, or send a letter to the Direct 

Marketing Association, Mail Preference Service, P.O. Box 643, Cannel, New York 10512. 

And finally, limit the free prize and sweepstakes drawings you enter and your attendance at free 

lunch seminars. Free lunches often place you in a situation where you can be pressured to make 

a purchase you might later regret. Never make a buying decision for at least 24 hours. 

By taking a few simple steps, older Americans can better spot and resist malicious solicitations, 

and reduce the risk of being defrauded. For more infonnation, visit www.DeliveringTrust.ora to get 

the facts on fraud and leam where to direct victims, and the people who care forthem, for help. 

9 D. Shadel, K. Pak and J. Gannon, "The effects of Investment Fraud Workshops on Future Investor 

Resistance: presentation at National Academy of Sciences meting on Elder Mistreatment and Abuse and 

Financial Fraud, Washington DC, June 22, 2010. 

3 
168 

UNIVERSITY OF l(f Cincinnati 

November 28, 2012 

Senator Herb Kohl, Chairman 

Senate Special Committee on Aging 

G31 Dirksen Senate Office Building 

Washington, DC 20510 

Dear Senators Kohl & Corker, 

College of Nursing 

William Cooper Procter Han 

(513) 558-5500 

www.Nursing.UC.edu 

University of Cincinnati 

Academic Health Center 

PO Box 210038 

Cincinnati OH 45221-0038 

Center for AgIng with Dignity Procter Hall- Room 426b 

(513) 558-2428 

www.SAFEafter60.org 

Senator Bob Corker, Ranking Member 

Senate Special Committee on Aging 

628 Hart Senate Office Building 

Washington, DC 20510 

The Center for Aging with Dignity at the University of Cincinnati is devoted to keeping 

people "SAFE After 60". We are researchers and educators focused on developing and 

advancing best-practice programs on promoting safety and preventing elder financial 

abuse. Based on our research and professional experience, we wish to raise two specific 

concerns in response to the recent testimony given regarding "America's Invisible Epidemic: 

Preventing Elder Financial Abuse." 

Knowledge Base Lacking - An increase in reported cases of elder financial abuse CEFA), 

whether due to the rapidly growing age 60+ population, or additional education/ 

awareness, is a recipe for disaster for a system that is fragmented, outdated and already 

operating at capacity_ We have serious concerns that little is known about the effectiveness 

of the existing investigative processes. Based on our work with Adult Protective Service 

CAPS) from Ohio, Kentucky, Indiana, and Illinois, we know there are significant differences 

in administrative and investigative procedures. APS representatives we have spoken with 

indicate a desire to do more but lack the time and expertise needed to objectively evaluate 

current processes. To help maximize protective and senior services' (P&SS) resources and 

processes, research is needed to identify barriers and gaps in order to improve systems, 

build capacity, and enhance collaboration. 

While we agree that EFA is a crime commonly committed through fraudulent actions 

including coercion, deception, and false pretenses, cases under a certain dollar threshold 

C e.g., >$100K, >$250K), are unlikely to be prosecuted. Whether or not an alleged case of 

EFA is unlawful, our protective system must also address the many aWful acts and repeated 

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169 

Æ 

indignities that many older people encounter. The awful acts of EFA entail situations that 

are horrific and which are often overlooked due to insufficient evidence or a lack of helpseeking behavior. 

Multifactorial Approach - Despite the testimony suggesting education is the single most 

important aspect in fighting EFA, we strongly disagree. Rather, we believe that a 

multifactorial approach, in which education is one element, is necessary. Education does 

not guarantee knowledge transfer or that the intended outcome will be achieved (e.g., 

personal responsibility, preventative measures). Additionally, older people are unlikely to 

take interest in learning about EFA if they do not perceive EFA as beingpertinentto them. 

Findings from research indicate that while education often leads to greater knowledge, it is 

insufficient to change people's behaviors and practices.1.2 

Having great concern that the voice of older people is often overlooked, we are conducting 

research regarding their perceptions, needs, and preferences specific to EFA. It is critically 

important to find out from older people what they would want and how they might best 

respond should they find themselves a victim of EFA. We call it "asking the experts." 

Additionally, various P&SS agencies in Southwestern Ohio have asked for our help as they 

recognize their limitations and inability to address needed system change. As the case load 

is certain to increase in the coming years, the more we can do to improve the effectiveness 

and efficiency of P&SS agency operations. Our research agenda also includes studies 

assessing the response to EFA by APS, law enforcement, and banks. 

At the University of Cincinnati, we promote and follow a Scientific/systematic process in 

order to make evidence-based decisions that support process improvement and program 

development. We welcome the opportunity to participate in discussions and contribute to 

body of EFA research. 

Respectfully submitted, 

Charles Puchta, MBA, CSA 

Director 

References 

Evelyn Fitzwater, DSN, RN 

Associated Director 

Sedlak, CA., & Doheny, M. 0., Jones, S. l. (2000). Osteoporosis Education Programs: Changing Knowledge and BehaViors. 

Public Health Nursing, (17)5, 398-402. Available at: http:{/onlinelibrarvwiley.eom/do!{10 1046/1.1525-

1446.2000.00398.xtabstract·jsessjonid=840E4341841131FOBQ2DF44CCDB6EB1.d01tOl 

Melarry, S. (2006). Journey to Healthy Aging: Impact of Community Based Education Programs on Knowledge and Health 

Behavior in Older Adults. The Forum on Public Policy. Available at: http·/Iforumonpublicpolicy.comlarchive07/mclarry.pdf 

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