Elder Financial Exploitation During a Pandemic: An Issue We Can’t Forget

Terri Luttrell, CAMS-Audit
April 3, 2020
Read Time: min

As the coronavirus pandemic takes a powerful hold on the United States, illicit activity such as cybercrime, check fraud, and other scams are rapidly increasing and is expected to continue throughout this difficult period. These are unchartered times that we are living through, and our senior citizens are particularly vulnerable. This sector of our population is at higher risk of serious complications including death if contracting COVID-19. Our seniors are living with concern for their health and the health of their loved ones. Many seniors are lonely and now living in isolation to avoid the virus, which makes them increasingly vulnerable to the increase in scams surrounding the coronavirus.

What is Elder Financial Exploitation (EFE)?

Elder Financial Exploitation (EFE) is perpetrated by family, friends, neighbors, caregivers, or others taking advantage of an older person. EFE occurs when a person misuses or takes the assets of a vulnerable adult for his/her own benefit -

  • without the elder’s explicit knowledge or consent
  • depriving the individual of vital financial resources for personal needs
  • taken via forms of deception, false pretenses, coercion, harassment, duress, or threats

Elderly persons are more vulnerable to fraudsters in times of crisis

Criminals are poised to take advantage of the more vulnerable during this public health emergency, particularly our elder population. Con artists are playing on the elderly’s fears and scamming them out of financial resources that they need to live a comfortable life.

According to Rachel Pourtnoy, Community Engagement Specialist with Adult Protective Services, elder financial exploitation is on the rise during this unprecedented health crisis. Scammers are targeting the elderly with increased door to door visits and well as phone calls relating to the coronavirus pandemic. Fraudsters are posing as Center for Disease Control (CDC) officers, creating fake badges and preying on elder individuals who are most at risk of COVID-19. In some cases, the perpetrator will take a mouth swab from the victim and charge a fee for a COVID-19 test or charge for a vaccine that doesn’t exist. Other scams include Medicare/Medicaid fraud using online advertisements for durable medical equipment, or routine products and services that they would normally receive from their physicians but are afraid to go in for an office visit due to the health risk. In addition, with the passing of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), fraud has increased with scams offering to rush stimulus checks to individuals for a fee. Unfortunately, many senior citizens are falling for these scams out of misplaced trust, confusion, and fear.

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What can you do to deter COVID-19 fraud?

The Better Business Bureau Senior Medicare Patrol has issued a COVID-19 Consumer Tip Sheet to help protect your customers, family members, and friends who are being targeted by these scams. The recommended tips are as follows:

  • Do not give out your personal information to anyone other than your doctor or trusted medical representative
  • Protect your personal information and treat your identification cards like a credit card
  • Never provide your personal information to anyone who contacts you through unsolicited methods
  • Be cautious of anyone who comes to your door offering free coronavirus testing, treatment, or supplies
  • Don’t click on links from sources you don’t know, which could put your computer or device at risk
  • Make sure the anti-malware and anti-virus software on your computer are up to date
  • Be cautious when purchasing medical supplies from unverified sources, including online advertisements and email/phone solicitations.
  • Ignore online offers for vaccinations. If you see ads touting products or cures for COVID-19, they are most likely a scam
  • Research before donating to a charity or crowdfunding site due to a public health emergency. Be cautious of any charities requesting donations by cash, gift card, or wire transfer
  • Be alert to “investment opportunities” - The U.S. Securities and Exchange Commission (SEC) is warning about online promotions, including on social media, claiming that products or services of publicly traded companies can prevent, detect, or cure COVID-19 and that the stock of these companies will dramatically increase in value as a result

What can your institution do to protect your elderly customers?

Financial institutions are in a unique position to detect and report illicit activity affecting our seniors. Front line staff, as well as BSA professionals, should be trained on EFE red flags. FinCEN issued an advisory in 2011 that lists transactional red flags and is still relevant today in relation to any scams against the elderly, including COVID-19 related:

  • Frequent, large withdrawals, including daily maximum withdrawals from ATM
  • Sudden NSF Activity
  • Uncharacteristic nonpayment for services, which may indicate a loss of funds
  • Debit transactions that are inconsistent for the elder
  • Uncharacteristic attempts to wire large sums of money
  • Closing of CDs or accounts without regard to penalties

File SARs appropriately when EFE is suspected

The FinCEN advisory also reminds financial institutions of their requirement to file SARs when EFE is suspected. The agency advises that in addition to selecting the appropriate SAR box (field 35, option d), the term “elder financial exploitation” should be included in the SAR narrative. The victim’s name and other available information should also be included in the narrative, not as a subject of the SAR.

Many states have mandatory reporting laws for financial institutions to contact Adult Protective Services when they suspect any type of elder abuse. To learn more about the laws in your state click the interactive map here. Whether or not yours is a mandatory reporting, please protect our elders and report. It’s the right thing to do.

Other COVID-19 Resources

Medicare: Medicare.gov/medicare-coronavirus

About the Author

Terri Luttrell, CAMS-Audit

Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size. She has successfully worked with institutions in developing BSA/OFAC programs, optimizing various automated solutions, and streamlining processes while ensuring all regulatory requirements are met. As the Compliance and Engagement Director at Abrigo, Terri provides insights that contribute and support long-term banking strategies based on analysis of market and industry trends, competitor developments, and financial and regulatory technology changes. She is an audit-certified anti-money laundering specialist and a board member of the Central Texas chapter of the Association of Certified Anti-Money Laundering Specialists (ACAMS). Terri earned her bachelor’s degree in business administration, specializing in business and finance, from the University of North Texas.

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