Treasury's FinCEN Sends Elder Financial Exploitation Advisory
One red flag could be unusual changes in contact information.
An arm of the Department or the Treasury best known for fighting money laundering wants you to help it fight financial exploitation of older adults, too.
The Treasury arm, the Financial Crimes Enforcement Network, or FinCEN, on Wednesday observed World Elder Abuse Awareness Day by asking financial institutions to speak up when they see “red flags.”
Life insurers, mutual fund companies and many other financial services providers qualify as financial institutions for FinCEN purposes, and they are supposed to file the same types of suspicious activity reports, or SARs, for suspected elder financial exploitation that they would file for suspected money laundering.
Some types of exploitation could involve relatives, unrelated con artists or others trying to tap a client’s mutual funds, annuities or cash-value life insurance policies.
What It Means
Financial advisors are not directly responsible for filing SARs, but the companies that do file SARs are supposed to tell advisors how to let them know about potential problems.
If you’re not sure where to go with concerns, ask the compliance people at the financial services companies you work with about their elder financial exploitation suspicion reporting procedures.
In addition to filing SARs, financial institutions with concerns are supposed to tell older customers who might be victims of financial exploitation to call the National Elder Fraud Hotline at the Department of Justice at 833-372-8311.
The Scope
Financial institutions filed about 72,000 SARs related to elder financial exploitation in 2021, and the volume of U.S. business suspected to be affected by elder financial exploitation increased to $3.4 billion in 2020, from $2.6 billion in 2019, according to FinCEN and Consumer Financial Protection Bureau data.
Red Flags
Some of the financial exploitation red flags include:
- Sudden, unusual changes in an older customer’s contact information.
- An older customer’s inability to answer basic questions about account activity.
- An older customer rushing to send money to help a loved one — by putting the money in the account of a seemingly unconnected business or person.
- A caregiver or other individual showing excessive interest in an older customer’s finances or assets.
- A sudden burst of transfers of assets out of an older customer’s account.
- Sudden, unusual failures by an older customer to pay for services.
Pictured: The U.S. Treasury building in Washington. (Photo: Michael A. Scarcella/ALM)