FinCEN issues elder financial exploitation advisory

The Financial Crimes Enforcement Network issued an advisory on June 15 alerting financial institutions to a growing number of elder financial exploitation incidents.

The advisory noted that more than 72,000 suspicious activity reports were filed in 2021 alone, an increase from 62,000 in 2020. 

“Financial institutions are uniquely situated to detect possible financial exploitation through relationships with older customers,” FinCEN stated. “They therefore play a critical role in helping to identify, prevent, and report elder financial exploitation to law enforcement and their state-based Adult Protective Services.” 

FinCEN called for such information to be incorporated into suspicious activity report filings, with the names of staff who witnessed the suspicious activity, and report that to law enforcement.

 FinCEN listed a number of red flags that banks should follow to prevent elder financial exploitation, including considering whether a transaction lines up with existing business practices. FinCEN said behavioral red flags indicating a possible victim include the customer’s account having immediate and unusual changes in contact information or new connections to phone numbers, accounts, or emails originating overseas with no known previous connection to the victim; unusual account activity from an older customer with known physical or emotional impairments; an elderly customer not being able to answer basic questions about their account activity; a caregiver or other person showing excessive interest in the elderly person’s accounts and showing controlling behavior; and numerous other signs. 

In the advisory, FinCEN described the differences between exploitation through theft and from scams. Scammers frequently pose as government officials, law enforcement agencies, or other reputable organizations, often trying to instill fear in the victim to solicit personal identifiable information and payments. Scammers also sometimes impersonate lottery or sweepstakes representatives, and  in 2021 alone, $547 million was reported lost through romance scams. Another major scam involves criminals contacting older adults and impersonating a grandchild, lawyer, or other reputable person to deceive the victim into immediately sending money to resolve an urgent situation involving a family member. In a separate scam, criminals pose as tech and customer support representatives at well-known companies falsely claiming that a virus or other malware has compromised the victims’ computers.

The report noted that perpetrators usually do not stop after first exploiting the victim, often re-victimizing the person, leading to further financial and social impacts. The alert warns that scammers sometimes sell victims’ personally identifiable information on the black market to other criminals.  

“The majority of incidents go unidentified and unreported as victims may choose not to come forward out of fear, embarrassment, or lack of resources,” FinCEN stated. “Older adults are targets for financial exploitation due to their income and accumulated lifelong savings, in addition to the possibility that they may face declining cognitive or physical abilities, isolation from family and friends, lack of familiarity or comfort with technology, and reliance on others for their physical well-being, financial management, and social interaction.”