IntroductionThe Board of Governors of the Federal Reserve System
(FRB), Consumer Financial Protection Bureau (CFPB), Federal Deposit
Insurance Corporation (FDIC), Financial Crimes Enforcement Network
(FinCEN), National Credit Union Administration (NCUA), Office of the
Comptroller of the Currency (OCC), and state financial regulators
(collectively, “the agencies”), are issuing this statement
to provide institutions supervised by the agencies (“supervised
institutions”) examples of risk management and other practices
that can be effective in identifying, preventing, and responding to
elder financial exploitation.
This statement does
not replace previous guidance on this subject issued by any of the
agencies, does not interpret or establish a compliance standard, and
does not impose new regulatory requirements or establish new supervisory
expectations. It is intended to raise awareness and provide strategies
to supervised institutions for combating elder financial exploitation,
consistent with applicable legal requirements.
1 BackgroundElder financial exploitation is the illegal use of an older adult’s
funds or other resources for the benefit of an unauthorized recipient.
2 Elder
financial exploitation can deprive older adults of their life savings
in whole or in part, devastate their financial security, and cause
other harm.
A recent study estimates annual losses
from U.S. older adults as a result of elder financial exploitation
at $28.3 billion.
3 The U.S. Department of
the Treasury’s 2024 National Money Laundering Risk Assessment
described elder financial exploitation as a growing money laundering
threat, which has been linked to more than $3 billion in reported
financial losses annually.
4 Furthermore, a FinCEN review of Bank Secrecy
Act (BSA) report data found that financial institutions filed 155,415
reports related to elder financial exploitation between June 15, 2022,
and June 15, 2023, associated with more than $27 billion in reported
suspicious activity, which may include both actual and attempted transactions.
5 In addition to financial losses, elder
financial exploitation can also result in increased reputational,
operational, compliance, and other risks for supervised institutions.
6Federal and state government agencies have raised
awareness of elder financial exploitation and worked to educate supervised
institutions and consumers about prevention and response strategies.
In this statement, the agencies provide examples of risk management
and other practices that supervised institutions could consider adopting.
7 Additionally,
appendix A to this Statement provides a list of resources issued by
federal and state agencies on this topic.
Section 1. Governance and OversightA number of laws and regulations related to consumer
protection and safety and soundness may be applicable to instances
of elder financial exploitation.
8 Consistent with such laws and regulations, a supervised
institution’s oversight strategies may include policies and
practices to better protect account holders and the supervised institution
from the impacts of elder financial exploitation.
Supervised institutions may consider enhancing or creating risk-based
policies, internal controls, employee codes of conduct, ongoing transaction
monitoring practices, and complaint processes to identify, measure,
control, and mitigate elder financial exploitation, provided such
policies do not result in age discrimination that is impermissible
under the Equal Credit Opportunity Act (ECOA).
9Effective actions aimed at guarding against elder financial exploitation
include open lines of communication among supervised institutions’
departments responsible for researching and responding to unusual
account activity, for example, across functions such as BSA compliance,
fraud prevention, and consumer protection, including fair lending.
Compliance with applicable privacy or other legal requirements is
necessary to ensure that the information of account holders remains
confidential and secure.
Section 2. Employee TrainingSupervised
institutions may find it beneficial to provide clear, comprehensive,
and recurring training for their employees on recognizing and responding
to elder financial exploitation.
10 Well-trained employees can increase a supervised
institution’s ability to detect and report elder financial exploitation.
Employee training may include identifying red flags
for different types of financial exploitation, providing proactive
approaches to detecting and preventing elder financial exploitation,
and detailing actions for employees to take when they have concerns.
Customer-facing employees may be trained to identify transactional
and behavioral red flags when conducting transactions for older adults,
including via powers of attorney or other agents.
11 Employees
may also benefit from detailed escalation processes and written procedures
that promote timely action for events they are most likely to encounter
in their roles.
Federal law provides that a financial
institution and certain employees are not liable in any civil or administrative
proceeding for disclosing suspected elder financial exploitation to
covered agencies if the financial institution has timely trained its
employees on identifying elder financial exploitation.
12 Section
3. Using Transaction Holds and Disbursement DelaysSupervised institutions have used transaction holds and
disbursement delays to prevent consumer losses and respond to various
situations that may involve elder financial exploitation. These practices
should be used appropriately and in compliance with applicable laws
and regulations.
13 Some state laws permit
supervised institutions to temporarily hold a transaction or delay
a disbursement of funds when they suspect any type of financial exploitation,
including elder fraud.
14 These statutes
generally provide timelines for transaction holds, and some provide
immunity for institutions and employees who meet specific requirements.
Supervised institutions may benefit from establishing
and implementing policies and procedures based on applicable laws
and regulations. It may be helpful for supervised institutions to
consider various factors, such as the account holder’s explanation
of the purpose of the transaction, the requirements to provide disclosures,
and the prohibitions against unfair, deceptive, or abusive acts or
practices. Supervised institutions may also consider procedures for
older adult account holders and their designated representatives to
establish the legitimacy of a potentially suspicious transaction.
Section 4. Using Trusted
ContactsSupervised institutions may establish
policies and procedures that enable account holders to designate one
or more trusted contacts that employees can contact when elder financial
exploitation is suspected.
15 For example, an account holder
might identify one or more family members, attorneys, accountants,
or other trusted individuals and authorize the supervised institution
to contact them if the supervised institution cannot reach the account
holder or suspects that the account holder may be at risk of financial
exploitation.
16 Unless separately authorized by the account holder, a third-party
trusted contact typically would not have authority to view account
information or execute transactions.
If a supervised
institution establishes a trusted contact designation process for
account holders, it may be beneficial to develop clear and effective
procedures for when and how to disclose to the account holder and
trusted contact that one or more transactions have indicated that
elder financial exploitation may be occurring.
17 Any disclosures to account holders or trusted contacts must comply
with applicable privacy laws and legal prohibitions, including the
confidential nature of SARs.
18 Section 5. Filing SARs
Involving Suspected Elder Financial ExploitationIn certain circumstances, financial institutions are required
under FinCEN’s, the NCUA’s, and the federal banking agencies’
laws and regulations to file SARs related to suspicious activity and
suspected violations of law or regulation, which may include fraud
and elder financial exploitation.
19 Additionally, supervised
institutions can voluntarily file SARs for suspicious activities related
to elder financial exploitation that do not meet the requirements
for mandatory filing, such as those involving dollar amounts lower
than the regulatory threshold.
20Supervised institutions
can consider how to detect and identify possible red flag indicators
of suspected elder financial exploitation, such as unusual behavior
of an older adult or their caregiver or an unexpected, large wire
transfer out of an account from which the account holder has no history
of similar activity. FinCEN’s 2022 Advisory on Elder Financial
Exploitation provides examples of financial and behavioral red flags.
21 Supervised
institutions can include any observed red flags of financial exploitation
in the narrative section of the SAR to describe the reasons why the
activity is suspicious.
22FinCEN’s 2022 Advisory
also requests that financial institutions mark the elder financial
exploitation checkbox (SAR Field 38(d)) and include “EFE FIN-2022-A002”
in SAR Field 2 (Filing Institution Note to FinCEN) and in the narrative
to indicate when elder financial exploitation is suspected.
23 This approach provides potentially useful information
to law enforcement and supports accurate elder financial exploitation
SAR data analysis and trend tracking.
24Supervised institutions are reminded of the confidential
nature of SARs and the prohibition on disclosing a SAR and any information
that would reveal the existence of a SAR, except in authorized circumstances.
25 No financial institution and no current or
former director, officer, employee, or agent of a financial institution
that reports a suspicious transaction, may notify any person involved
in the transaction that the transaction has been reported or otherwise
reveal any information that would reveal that the transaction has
been reported.
26 Section 6. Reporting to Law Enforcement,
Adult Protective Services (APS), and/or Other Entities, as AppropriateTimely reporting of elder financial exploitation
increases the likelihood of successful recovery of funds. In 2013,
the CFPB, the Commodity Futures Trading Commission (CFTC), FDIC, FRB,
Federal Trade Commission (FTC), NCUA, OCC, and Securities and Exchange
Commission (SEC) issued joint guidance to confirm that the privacy
provisions of the Gramm-Leach-Bliley Act generally do not prevent
financial institutions from reporting elder financial exploitation
to appropriate local, state, or federal agencies.
27Some state laws require certain supervised institutions
to report suspected elder financial exploitation to APS, local law
enforcement, and/or regulatory authorities.
28 In states
without mandatory reporting, there may be avenues for supervised institutions
to voluntarily report suspected elder financial exploitation to relevant
state or local authorities. Voluntarily notifying law enforcement
directly of suspected elder financial exploitation and the underlying
facts may expedite and assist law enforcement investigation and prosecution.
29In addition to filing various reports, supervised
institutions can consider establishing procedures for referring individuals
who may be victims of elder financial exploitation to the U.S. Department
of Justice (DOJ)’s National Elder Fraud Hotline (833-372-8311)
for assistance with reporting to the appropriate government agencies.
30 Supervised
institutions may also consider informing older adults about the options
for reporting elder financial exploitation to local law enforcement,
FTC, the FBI’s Internet Crime Complaint Center (IC3), the U.S.
Postal Inspection Service (USPIS), the Social Security Administration
(SSA), or other federal, state, or local agencies.
31Some agencies or programs may be able to
help victims recover stolen funds. For example, the IC3 Recovery Asset
Team is a domestic program designed to “streamline communication
between financial institutions and assist FBI field offices with the
freezing of funds for those who made transfers to fraudulent accounts
under false pretenses.”
32 Another example is FinCEN’s international
Rapid Response Program that “helps victims and their financial
institutions recover funds stolen as the result of certain cyber-enabled
financial crime schemes, including business e-mail compromise.”
33
Section 7. Providing Financial Records to Appropriate
Authorities
In addition to the reporting
procedures discussed above, in some instances and consistent with
applicable law, supervised institutions may expedite documentation
requests for APS, law enforcement, or other investigatory agencies
for active elder financial exploitation cases.
34
For information on providing supporting documentation for financial
records that are associated with a SAR filing, please refer to FinCEN’s
FAQs.
35 “Supporting documentation”
refers to all documents or records that assisted a supervised institution
in making the determination that certain activity required a SAR filing.
36
Section 8. Engaging with Elder Fraud Prevention and Response NetworksSupervised institutions may also help protect older
adults from financial exploitation by engaging with elder fraud prevention
and response networks that include professionals from various agencies
and organizations.
37 These
networks are often cross-disciplinary, collaborative efforts to protect
older adults from financial exploitation.
These
networks can help improve coordination among supervised institutions,
law enforcement, APS, local aging service providers, and other key
partners.
38 Networks can also
help supervised institutions engage in professional cross-training,
multidisciplinary case review and coordination, and community education
efforts related to elder financial exploitation.
Section 9. Consumer Outreach and
AwarenessWhen consumers are informed about
specific types of scams and understand perpetrators’ tactics,
they are more likely to recognize a scam and are less likely to engage
with a perpetrator or lose money.
39 Supervised
institutions can support their account holders by providing timely
information about trending scams and ways to avoid them.
40Many federal, state, and local government agencies, as well as nonprofit
organizations, trade associations, and other groups, provide free
educational resources for consumers and caregivers about preventing
elder financial exploitation. Supervised institutions are encouraged
to share free resources provided by government agencies with their
account holders or as part of community outreach and awareness efforts. See appendix A below for examples of these resources.
Appendix A: Elder Financial Exploitation
Resources from Government AgenciesReports,
Research, and Recommendations
Elder Justice Coordinating Council,
Report to Congress (2018)—includes examples
of elder fraud prevention work by ACL, CFPB, Centers for Medicare
& Medicaid Services (CMS), Corporation for National and Community
Service (CNCS), DOJ, FTC, SEC, SSA, Treasury, U.S. Department of Health
& Human Services (HHS), U.S. Department of Veterans Affairs (VA),
and USPIS
FinCEN,
FinCEN Issues Analysis on Elder Financial Exploitation (2024)—includes list of common scams in appendix A
Treasury,
National Money Laundering Risk Assessment,
Elder Financial Exploitation (2024)
Federal Resources that Supervised Institutions
May Use with Consumers
State Resources that Supervised Institutions
May Use
California Department of Financial
Protection and Innovation,
Preventing and Reporting Elder Financial Abuse
District of Columbia Department of
Insurance, Securities and Banking,
Financial Empowerment Resources for DC Seniors
Idaho Department of Finance,
Elder Financial Topics
Kentucky Department of Financial
Institutions,
Senior Scam Jams
Maine Council for Elder Abuse Prevention,
Committed to Ending Elder Abuse in Maine
Massachusetts Executive Office of
Elder Affairs,
Protecting Older Adults from Abuse
Minnesota Commerce Department: Money
and Banking,
Senior Fraud
New Hampshire Banking Department,
Avoiding Scams and Fraud
New Mexico Regulation & Licensing
Department,
Senior Citizens
New York State Department of Financial
Services,
What is Elder Financial Exploitation?
North Carolina Secretary of State,
Attorney General, and Commissioner of Insurance,
Scam Jam Video
Interagency statement of
Dec. 5, 2024 (SR-24-8).