Posts Tagged ‘financial abuse’

Recent Developments in D.C. To Combat Financial Abuse of the Elderly

Thursday, March 15th, 2018

Recent Developments in D.C. To Combat Financial Abuse of the Elderly

by Robert M. Jaworski, Esq.

Financial abuse of the elderly is getting some attention in Washington these days, and, some say, it’s about time.  On February 22, 2018, Attorney General Jeff Sessions and law enforcement partners announced[1] the largest coordinated sweep of elder fraud cases in history.  In addition, it was reported[2] on March 13, 2018, that an elder fraud bill sponsored by Senate Aging Committee Chairwoman Susan Collins (R-Maine) was recently folded into the banking regulation bill (S. 2155) that is expected to be approved by the Senate in the near future.  Details concerning both of these developments are set forth below.

Nationwide Elder Fraud Sweep Coordinated by the Department of Justice

The cases, which include criminal, civil and forfeiture actions, involve more than 250 defendants from around the globe. They are charged with victimizing more than a million Americans, most of whom are elderly.  Of the defendants, more than 200 have been charged criminally.

The actions charged a variety of fraud schemes, including large scale mass mailing, telemarketing and investment frauds, as well as individual instances of identity theft and theft by guardians.  One case alone concerned a scheme that operated from 14 foreign countries and resulted in losses to American victims totaling more than $30 million.

Mass mailing schemes.  In each of the mass mailing schemes, fraudsters sent direct-mail letters to individuals falsely promising them that they had won cash or other valuable prizes.  All they had to do to claim their prizes was to send back a payment for what was represented as processing fees or taxes. The letters appeared to come from legitimate sources, typically on official-looking letterhead, and to have been personally addressed to each recipient. When an individual took the bait and sent the requested fee, the fraudsters simply kept the money.  No victim ever received a promised prize.  Worse yet, when people showed a susceptibility to these scams, the fraudsters repeatedly targeted and victimized them with other scams.

Other Schemes.  Other examples of elder financial exploitation schemes prosecuted by the Department of Justice include:

  • “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
  • “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
  • “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
  • “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes; and
  • “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians;

The Department of Justice indicates that it has partnered with Senior Corps to educate seniors about these types of scams and prevent further victimization.  Senior Corps is a national service program administered by an independent federal agency, the Corporation for National and Community Service (CNCS).  You can access information on Senior Corps’ efforts to reduce elder fraud by clicking here.  If you suspect that you are a victim of a scam, you can file a report with the Federal Trade Commission by clicking here.  Finally, remember that the best way to avoid becoming a victim of a scam is to be skeptical of anything that sounds too good to be true.  It probably is too good to be true!  Check it out first.

Senator Collins Elder Fraud Bill

This bill, Senate Bill S-223[3], which is called the “Senior$afe Act of 2017,” strives to prevent elder financial abuse by encouraging financial institutions (including credit unions, insurance agencies, banks, investment advisers, and broker-dealers) and their employees to sound an alarm bell whenever they suspect that an elderly person is being financially exploited.  The bill seeks to accomplish this objective by immunizing these institutions and employees from potential liability in any civil or administrative proceeding for disclosing such suspicions.

This immunity, however, is subject to the following conditions:

  • The disclosure is made only to a State or Federal banking or securities regulator, a State insurance regulator, a law enforcement agency, and/or a State or local adult protective services agency.
  • The disclosing employee must be a supervisor or compliance officer employed by the financial institution at the time of the disclosure and have made the disclosure in good faith and with reasonable care.
  • The disclosing employee must have previously received training from the financial institution, appropriate to the employee’s job responsibilities, concerning (1) how to identify and report suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen, and (2) the need to protect the privacy and respect the integrity of each individual customer of the financial institution.

Interestingly, New Jersey already has a similar law on the books, which dates back to 1998.  The New Jersey Foundation for Aging helped to educate concerned individuals and agencies about that law following its enactment.

 

Mr. Jaworski is a member of the NJFA Board of Trustees and an attorney with the law firm Reed Smith, LLP.  He specializes in providing banks and other financial institutions with advice and assistance concerning their responsibilities to comply with applicable federal and state laws and regulations, including, in particular, consumer protection laws and regulations.

 

 

 

Fraud is still out there.

Thursday, September 27th, 2012

Fraud is still out there.

Scammers continue to target seniors.

The Certified Financial Planner Board of Standards, a non-profit organization, conducted a survey of financial planners. In this survey they found that seniors who become victims of financial abuse lose an estimated $140,500.

The financial planners surveyed indicated that seniors who were victims of “unfair, deceptive or abusive practices” were often scammed through misleading marketing schemes. As we have said before, there is no such thing as a free lunch. But often that is just what the scammers do is lure seniors in with a seminar where they get a free lunch. The catch is that is really a sales pitch for misleading or fraudulent investments. 73% of the advisors surveyed said they knew a senior that was invited to this type of “free lunch” seminar.

The financial advisors also stated that they knew of seniors getting unsolicited pitches at home through the mail, e-mail, or the phone. While these type of investment scams, reverse mortgage scams and even sweepstakes scams are prevalent, sometimes seniors are also victims of fraud committed by someone they know. Of the planners surveyed, 35 % of them reported that they knew of at least one case were an elder was the victim of financial abuse by someone they knew. And another 20% said that the perpetrator was the guardian or Power of Attorney for the senior.

And the types of fraud don’t end there either. 83% of the advisors surveyed stated that seniors have been scammed by other financial advisors. Just like the “free lunch” seminars, there are financial advisors out there that have offered inappropriate financial products to seniors, as well as, misrepresented or omitted information about the costs and risks of those products.

Despite the fact that these types of fraud result in big losses for seniors, only 16% actually report the abuse to authorities. Many things can deter seniors from reporting crime, if the perpetrator is a family member they may not want to press charges or they may be afraid to report them. Some seniors may be embarrassed to admit they feel for a scheme, for fear people will think they are feeble. Or, they may be experiencing cognitive impairment or dementia and don’t want to admit that either.

It is important to make sure the people you’ve selected or hired to help with your finances are trustworthy. It never hurts to obtain a second opinion about any investment advice. If you think you’ve been the victim of financial abuse or fraud, please report it. If you are concerned that a loved one may have been taken advantage of, encourage them to report it or make the call yourself.

You can report financial abuse to the police. You can also reach out to your County Office on Aging to find out about programs or services. To report any elder abuse concern please contact your County Adult Protective service agency.

To find your County Office on Aging phone # visit, www.njfoundationforaging.org/services.html or call 1-877-222-3737.

To find your County’s Adult Protective Service agency visit: http://www.state.nj.us/health/senior/adultpsp.shtml

or call 1-800-792-8820