Elder Justice: National Strategy Needed to Effectively Combat Elder Financial Exploitation
Released: 2012-11-15T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Elder financial exploitation is the illegal or improper use of an older adult's funds or property. It has been described as an epidemic with society-wide repercussions. While combating elder financial exploitation is largely the responsibility of state and local social service, criminal justice, and consumer protection agencies, the federal government has a role to play in this area as well. GAO was asked to review issues related to elder financial exploitation. This report describes 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 obtain this information, GAO interviewed state and local social service, criminal justice, and consumer protection officials in California, Illinois, New York, and Pennsylvania--states with large elderly populations; officials in seven federal agencies; and various elder abuse experts. GAO also analyzed federal strategic plans and other documents and reviewed relevant research, federal laws and regulations, and state laws.

section_title: What GAO Found
paragraphs: Officials in each of the four states GAO contacted identified the need for more safeguards and public awareness activities to help prevent elder financial exploitation. They also noted that it is difficult to prevent exploitation by individuals 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 public 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 elder 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 clear 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 law 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.

section_title: What GAO Recommends
paragraphs: Federal agencies should develop a written national strategy addressing challenges GAO identified, facilitate case investigation and prosecution, and improve data, among other things. The Consumer Financial Protection Bureau and the Department of Health and Human Services supported GAO's recommendations. FTC did not believe it is necessary to examine the feasibility of requiring victim's age in complaints. GAO maintains the importance of its recommendation.

section_title: Letter
paragraphs: 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 adults 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  adults 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.  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 adults in that state who had suffered substantial losses.

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 adults 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 non- profit 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  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 non- generalizable sample of elder financial exploitation cases.

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  of the Inspectors General for Integrity and Efficiency.
subsections: section_title: Background
paragraphs: Elder financial exploitation, one type of elder abuse, can occur in  conjunction with, and might lead to other types of elder abuse.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.

Older adults 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. Moreover,  financial capacity—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 it is too late.

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 Postal Inspection Service (see fig. 1).

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).

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  across federal agencies in this area. The Older Americans Act of 1965  (OAA) requires AoA to develop objectives, priorities, policy, and a long- term 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  communities 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.

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-5). The EJA was enacted as part of the  Patient Protection and Affordable Care Act, which was signed into law on March 23, 2010. 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 adult protective services; o  conduct research related to the provision of adult protective  o  provide technical assistance to states and others that provide  or fund the provision of adult protective services; 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. § 2042(a)(1)(C), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(C)).     § 2042(a)(1)(D), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(D)).     § 2042(a)(1)(E), 124 Stat. 794 (codified at 42 U.S.C. § 1397m-1(a)(1)(E)).

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 activities, and provide  recommendations to Congress.

Currently, the Elder Justice Coordinating Council consists of the following  federal agencies: Consumer Financial Protection Bureau, Corporation for  National and Community Service, 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 it to coordinate its consumer protection efforts of older   CFPB’s Office for Older Americans is  adults with other federal agencies. charged with facilitating the financial literacy of seniors on protection from  unfair, deceptive, and abusive practices and on current and future  financial choices.

section_title: States Identified the Need for More Safeguards and Public Awareness Activities to Prevent Elder Financial Exploitation
subsections: section_title: States Cited Need for More Safeguards to Prevent Elder Financial Exploitation
paragraphs: 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.

Older adults may consult with a variety of financial professionals, such as  financial planners, broker-dealers, and insurance agents. However,  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 credits, 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). 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 “Senior Specialist”

Calling himself a senior financial advisor, an insurance agent licensed in California met  an 89-year-old partially blind, intermittently 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 out to 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 adults may be fooled by investment  professionals who use questionable tactics to market financial products,  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 unsuitable  recommendations, and in 14 seminars there were fraudulent practices  used, such as selling fictitious investments.

Preventing the sale of unsuitable or fraudulent investments to older adults  is difficult.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 “Ponzi” Scheme The founder and president of a real estate and financial consulting firm convinced  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 turned out to be a “Ponzi” 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 York U.S. Attorney’s Office, which  sought sentencing enhancements for targeting the elderly. 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  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.expects to share its results 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.”

A month after an elderly man with dementia and his wife agreed to add their  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 the next 3 months, the 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 the local district attorney to investigate. 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 the  prosecutor sought restitution, the $600,000 was not recoverable—it had been used to  pay off 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 explicitly 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.

According to the Uniform Law Commission, 13 states have adopted the  entire Uniform Power of Attorney Act. 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 adults from abuse by  guardians, who are granted authority by a state court to make decisions  in the best interest of an incapacitated individual concerning his or her  person or property. While guardians can play a 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  courts and federal agencies that have enabled guardians to chronically  abuse their wards and/or others.

Exploitation 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 with 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 OAA 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.

Older adults may rely on and trust in-home caregivers, and some  caregivers have used that relationship to exploit their clients. 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.

OAA Title III-B provides funding for in-home services, such as personal care, chore,  and homemaker assistance. 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. 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. 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.

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. As  required by the Patient Protection and Affordable Care Act of 2010, 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 long- term care facilities and providers, such as home health agencies and  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.

State and local authorities in the four states we visited told us current  safeguards are not always sufficient to prevent exploitation by those older  adults 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.

section_title: State and Federal Officials Called for Greater Focus on Public Awareness
paragraphs: 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.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.

However, APS and law enforcement  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  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.

However, although the OAA calls for a coordinated federal elder justice  system, 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. 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 “all-of-government” 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.

section_title: Difficulty Gaining Expertise, Sustaining Collaboration, and Obtaining Data Hinders States’ Responses to Elder Financial Exploitation
subsections: section_title: Special Knowledge and Skills Are Needed to Respond to Elder Financial Exploitation
paragraphs: 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. For example, some state and local officials told  us they attempt to acquire investigative expertise through formal and on- the-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. 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).

Under the EJA, HHS is authorized to develop and disseminate best  practices and provide training for APS workers, 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.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.

For example, AoA’s  Additionally, Justice officials told us that it 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  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 California 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.

section_title: States Identified Additional Federal Support Needed to Sustain Crucial Collaborations across Systems and Levels of Government
subsections: section_title: Collaboration between APS and Criminal Justice Systems
paragraphs: The OAA requires AoA to develop a plan for promoting collaborative  efforts to support elder justice programs at all levels. 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   Experts have  partners can more easily accomplish both of these goals.noted that some type of multidisciplinary response to elder abuse— including elder financial exploitation—is prudent because of the complex  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. 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.relevant promising practices in this area could help promote creation of  such groups—particularly when resources are limited—and ensure their  success.

However, information on  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).

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.

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  to pay sizeable sums before they can receive their winnings. In 2011,  the FBI’s Internet Crime Complaint Centercomplaints from victims of all ages about online fraud alone, with reported  losses of about $485 million.

Local law enforcement authorities in the four states we visited indicated  that investigating and prosecuting the growing number of cases involving  interstate and international mass marketing fraud, which often target older  adults, is particularly difficult for them. For example, coordinating with law   so state  enforcement authorities in other jurisdictions is labor intensive,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 authorities.

In addition to not knowing whom to contact, state and local law  enforcement officials in the four states we reviewed told us that they are  concerned that federal agencies do not take enough of the cases that are  referred to them. For example, a law enforcement official from California  described a case of widespread interstate check fraud, expressing  frustration with federal agencies that would not provide any support when  he requested it. Federal officials, on the other hand, told us that they  cannot 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 to 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.

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 authorities 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. Justice officials  said they encourage individuals and state and local authorities to file a  complaint of suspected fraud to either 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 it 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 state- level 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-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 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.  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.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   Despite  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. 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.

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  financial exploitation. 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. As a result, 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.

There are two federal laws that generally protect the privacy of consumer  banking records: the Right to Financial Privacy Act of 1978 (RFPA) and  the Gramm-Leach-Bliley Act.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.

Each establishes standards that banks  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.

section_title: Incomplete Data Hinder Efforts to Combat Elder Financial Exploitation
paragraphs: 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.undertaken such a study.

However, according to our analysis, no other state has  Similarly, data on the extent of elder financial exploitation over time could  help state and local APS, as well as law enforcement agencies, assess  the effectiveness of their efforts to combat it. The OAA 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, 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.

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. 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  develop a nationwide system to collect and compile these data.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.

section_title: Conclusions
paragraphs: 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 governmentwide 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  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 exploitation. 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.

section_title: Recommendations for Executive Action
paragraphs: 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  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.

section_title: Response to Agency Comments
paragraphs: 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 play a  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.

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.

Mission  To develop a comprehensive,  coordinated, and cost-effective  system of home- and community- based services that helps elderly  individuals maintain their health  and independence.

How agency prioritizes  elder financial exploitation   Strategic goal of ensuring the rights  of older people and preventing their  abuse, neglect, and exploitation.

Coordination with other agencies

Works with state aging agencies to help them develop statewide plans  conduct research on and  develop information on best  practices for Adult Protective  Services (APS),

Through NCEA, partnered with Treasury on its Go Direct financial

Partnered with Treasury and the Financial Services Roundtable on a provide technical assistance to  toolkit for training financial institutions on elder financial exploitation

Worked with the SEC on several Seniors Summits that brought establish centers to conduct  research, develop expertise,  and improve law enforcement’s  ability to combat elder financial  exploitation  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.

Contact information  Call: (202) 619-0724

Co-leads an informal interagency workgroup that helps facilitate  federal elder justice activities.

On April 16, 2012, AoA became part of the Administration for Community Living, which also includes HHS’s Office  on Disability and Administration on Developmental Disabilities.


Question-summary annotations: questions: question: What kinds of elder financial protection are needed?
answer: Officials in each of the four states GAO contacted identified the need for more safeguards and public awareness activities to help prevent elder financial exploitation. They also noted that it is difficult to prevent exploitation by individuals such as financial services providers, power of attorney agents, guardians, and paid in-home caregivers.
child_questions: question: How is responsibility regarding this issue distributed?
answer: 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.

question: How are the reviewed agencies attempting to increase public awareness of this issue?
answer: The seven federal agencies GAO reviewed have undertaken activities to increase public awareness of elder financial exploitation.
child_questions: question: What factors limit this strategy?
answer: While some experts observed that a nationwide approach to educating the public is needed, federal public 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.

question: What alternative methods exist for raising awareness?
answer: 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.

questions: question: What factors hinder the response to elder financial exploitation?
answer: 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 elder financial exploitation.
child_questions: question: How have agencies attempted to mitigate these issues?
answer: 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.
child_questions: question: How effective is this federal support?
answer: 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 clear how they should obtain the federal support they need to respond to interstate and international cases.

question: What are the limitations of the FTC's database?
answer: 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.
child_questions: question: How could the database effectiveness be improved?
answer: 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.

questions: question: What is elder financial exploitation?
answer: Elder financial exploitation is the illegal or improper use of an older adult's funds or property.
child_questions: question: How prevalent is this issue?
answer: It has been described as an epidemic with society-wide repercussions.

question: How is responsibility for fighting this issue delegated?
answer: While combating elder financial exploitation is largely the responsibility of state and local social service, criminal justice, and consumer protection agencies, the federal government has a role to play in this area as well.

question: What does this report cover?
answer: This report describes 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.

questions: question: How should federal agencies approach elder financial exploitation?
answer: Federal agencies should develop a written national strategy addressing challenges GAO identified, facilitate case investigation and prosecution, and improve data, among other things.
child_questions: question: How did CFPB and HHS respond to GAO's recommendations?
answer: The Consumer Financial Protection Bureau and the Department of Health and Human Services supported GAO's recommendations.

question: How did FTC respond to GAO's recommendations?
answer: FTC did not believe it is necessary to examine the feasibility of requiring victim's age in complaints. GAO maintains the importance of its recommendation.