July 01, 2019

Analysis: Financial Elder Abuse is on the Rise

This Growing National Trend Cost Individuals and Businesses $6 Billion in Four Years

By Carole Fleck
Report: Elder Fraud is on the Rise

Report: Elder Fraud is on the Rise

(The pdf for the issue in which this article appears is available for download: Bifocal, Vol. 40, Issue 6.)

Financial exploitation of older adults by family members, caregivers, and scammers has soared in the United States, according to an analysis of reports by banks, credit unions, financial services businesses, and casinos. Together, the businesses reported a record 180,000 cases of elder fraud that bilked, or attempted to cheat, elders and financial institutions out of more than $6 billion over four years.  

The new analysis by the Consumer Financial Protection Bureau was based on Suspicious Activity Reports (SARs) filed with the Financial Crimes Enforcement Network from 2013 to 2017. During that period, the number of SARs filings quadrupled to 63,500 cases in 2017. What’s worse, the CFPB estimates that the number of filings represent only a fraction of cases involving elder financial abuse nationwide.

“Financial institutions are seeing vast numbers of their older customers fall prey to financial exploitation, and they’re filing hundreds of thousands of confidential reports with the federal government about these suspicions. The CFPB has been working hard to protect older adults from this devastating problem, and one challenge has always been a lack of detailed data,” says Naomi Karp, a senior policy analyst with the CFPB.

The first-ever public analysis of a rich dataset offers a better understanding into elder fraud as well as approaches to improve prevention and response. “We hope to continue to work with a spectrum of stakeholders to build on the report’s findings and implications,” Karp says.

According to the report, when older adults were exploited by someone they knew, the financial losses were far greater—about $50,000 compared with $17,000 when the suspect was a stranger.

Other findings by the CFPB:

·         One third of the individuals who lost money were ages 80 and older 

·         Adults ages 70 to 79 had the highest average monetary loss at $45,300

·         In 7 percent of the elder financial exploitation SARs, older adults lost more than $100,000

In about 75 percent of the SARs, the targeted older adult lost money, according to the CFPB. The filer, or financial institution, lost money in 9 percent of all cases.

Although financial institutions increasingly were filing elder financial exploitation SARs, fewer than one-third indicated that they informed adult protective services, law enforcement, or other authorities about their suspicions. The CFPB called it a “missed opportunity to strengthen prevention and response” when financial institutions fail to report these cases directly to authorities.