FinCEN Releases Advisory on Elder Financial Exploitation

FinCEN Releases Advisory on Elder Financial Exploitation

July 07, 2022

On World Elder Abuse Awareness Day, June 15, 2022, the Financial Crimes Enforcement Network (FinCEN) released its first advisory on elder financial exploitation (EFE) since 2011. The advisory highlights the increasing number of Suspicious Activity Reports (SARs) filed related to EFE, including 72,000 SARs in 2021, while also emphasizing that many more cases likely went unreported. FinCEN reminded financial institutions that they are “uniquely situated to detect possible EFE through their relationships with customers. They, therefore, play a critical role in helping to identify, prevent, and report EFE to law enforcement, their state-based Adult Protective Services, and any other appropriate first responder, as well as assisting older customers who fall victim to financial exploitation.”

The EFE Advisory divides EFE into two categories: elder theft and elder scams. FinCEN defines elder theft as “[s]chemes involving the theft of an older adult’s assets, funds, or income by a trusted person,” whereas elder scams are defined as “[s]cams involving the transfer of money to a stranger or imposter for a promised benefit or good that the older adult did not receive.” Financial institutions should keep abreast of the different typologies outlined within the advisory, among others, and should established policies and procedures for monitoring and reporting such behavior.

Specific typologies listed in the advisory are as follows:

  • Trusted persons using deception, intimidation, and coercion against older adults to access, control, and misuse an elder’s finances
  • Government imposter scams
  • Romance scams
  • Emergency/person-in-need scams
  • Lottery and sweepstakes scams
  • Tech and customer support scams

A list of 12 behavioral red flags and 12 financial red flags are also listed in the advisory. Behavioral red flags are most likely to be detected by front line staff while opening or closing accounts and assisting elder individuals with transactions and inquiries. Firstly, it is important that financial institutions train all employees, but especially customer facing personnel, on EFE behavioral red flags in order to better protect and serve their older customers. Secondly, compliance departments should ensure that they are monitoring for the financial red flags listed in the EFE advisory that are relevant to their institution. Transaction monitoring systems and/or internal reports can be used by compliance personnel to detect financial red flags.

The advisory closes with a reminder that financial institutions should file a SAR for suspected EFE. Lastly, financial institutions should make sure they check the box for EFE (SAR Field 38[d]) when filing.

As made clear in the advisory, EFE is on the rise and is in the crosshairs of FinCEN, law enforcement, and regulators. If you need assistance with EFE training, monitoring, or reporting, contact Stout today.

View the EFE Advisory.

Contributing author: Steven Bunn of Stout