Prevention of Elder Financial Abuse
- by: John Cronin
- recipient: House Committee on Financial Services and US Senate Committee on Finance
The elderly all too often have their life's savings depleted by one of their children or other close individual. They often are not aware of the stealing or are afraid to say anything. If others uncover the crime and try to report it, they sadly discover that law enforcement and banks will not intervene. If a stranger uses a elder's debit card to steal money, then it's a crime. If the elders son or daughter uses the debit card to steal money, it's a family matter. That must end. Stealing from the elderly must be treated as a crime regardless if the thief is a stranger, family member, close friend or health aide.
On this petition I have listed new banking procedures to make it very difficult to steal from an elderly person. At the very least, it slows the rate of stealing and makes detection and identification easier. These procedures are based on how my mother was wiped out and how it could have been prevented.
We the undersigned recognize our elderly citizens are at risk for financial abuse and need protection. The thieves are typically children or other close individuals who can take advantage of the trust and poor health of the elderly victim. The thief may have Power of Attorney. Because the thieves typically have intimate knowledge of the victim, they can easily access online accounts and use financial instruments (checks, debit cards, etc) at will. Because the theft is performed by a family member, banks and law enforcement currently are reluctant or unable to help. We propose banking procedures which will greatly inhibit the ability of an individual to access and use the accounts of an elderly person. These procedures will also help identify possible financial abuse.
It must be understood that:
1) Elder financial abuse is a form of identity theft.
2) An elderly person may not be aware someone is stealing from them.
3) An elderly person may be reluctant to report theft or suspicious financial activities.
4) An elderly person may be reluctant to assist authorities in the apprehension and conviction of the thief.
5) An elderly person may be financially and/or mentally incompetent.
6) a Power of Attorney may also be reluctant to report theft or suspicious financial activities.
7) for both the elderly victim and the Power of Attorney, the fear of retribution from the thief is real (especially if the thief is a drug addict or involved in other criminal behavior).
8) A Power of Attorney may be a thief.
A) Bank procedures to be implemented if an elderly person does not opt out OR has appointed a Power of Attorney.
Automatic bill pay can be set up only through a personal meeting with a bank representative (not online). The bank representative must be alert to suspicious activity. The bill or bills to be paid must be in the name of the account holder (the elder). If a fixed payment amount changes, the new amount must be furnished to a bank representative. This provision prevents a thief from paying his/her own bills from the elders accounts.
Outside companies/businesses can no longer directly debit bank accounts and credit cards. The elder or Power of Attorney MUST write a check. This provision prevents the thief from establishing accounts (such as cable TV or Ezpass) using the elders bank accounts with service charges being paid by the elder without the elders knowledge and/or consent. If the thief is the Power of Attorney, this leaves a paper trail.
The signature on checks and deposits MUST match a signature on file at the bank or on the Power of Attorney documents. This provision prevents the forging of elders checks and cashing/depositing checks made payable to the elder. Theft will be limited to the Power of Attorney.
ATM withdrawals must be limited to either a historical average or set by the elder (perhaps $200 in any seven day period). To withdraw any additional monies shall require meeting a bank representative. This provision limits an easy and common method of theft. It will also slow the rate of theft.
Checks made out to cash from the elders account are NOT allowed. This provision prevents an easy and common method of theft.
A check from the elders account can NOT be used to pay the bill of another person. This provision prevents a thief from paying his/her own bills from the elders account.
Credit card and debit card purchases MUST have a signature match. NO use of PIN allowed. This provision prevents anyone other than the account holder from using the credit/debit card.
The use of a credit card and/or a debit card for a purchase utilizing the internet, telephone or mail is NOT permitted; elder must write a check. This provision prevents the thief from making a purchase using those cards.
When an adult parent (of any age) enters into a real estate transaction with his/her child, a lawyer must inquire as to the wishes (in the will) of the parent. If the lawyer determines the parent wants property divided, then they must structure the deed so that can happen OR the parent should disburse any funds (inheritance) at the time. This provision prevents the elder from unknowingly giving all their money to the thief through a deed.
B) The procedures outlined in part A above are always in effect when a surviving spouse aged 65 years old or older appoints a power of attorney. Opt out is not available.
1) After the Power of Attorney document is signed, the lawyer or notary public WILL send a copy to:
1a) US Post Office. Elders mail is then re-directed to the Power of Attorney.
1b) Credit reporting agencies; to be watchful.
1c) Banks in order to implement the procedures outlined in Part A above. 1d) Businesses and service providers which the elder uses.
C) Unless the elder opts out, the procedures outlines in Part A above take effect at age 65.
D) Opt out procedures (only when there is no Power of Attorney)
1a) The elder MAY opt out during the calendar month prior to their 65th birthday and one calendar month prior to subsequent birthdays.
1b) The option to opt out automatically expires on the elders following birthday. The elder may again opt out up to one month prior to his/her next birthday.
1c) To opt out requires meeting with a representative where the elder banks or an attorney. Several copies of an official and signed opt-out document with a raised seal will be provided to the elder. That document can be provided by the elder to businesses and financial institutions to prove they have opted out and the procedures in Part A above are not required. The opt-out document and provisions expire on the elders next birthday.
1d) The elder can opt in at any time without meeting a bank representative.
1e) The elder is NOT permitted to opt out if a Power of Attorney is appointed.
1) Banks shall provide training to employees to recognize indicators of financial abuse.
2) Banks must be alert to a sudden and dramatic change in transactions and/or phone inquiries.
3) Banks must maintain records of all activity on suspected accounts including photos from ATM transactions.
4) Police shall have officers specially trained to review any reports of suspected financial abuse.
5) If a Power of Attorney has been appointed, he/she MUST make a quarterly report or accounting of transactions to a third party (lawyer, accountant or bank). The third party may require more frequent reports. The Power of Attorney MUST keep receipts for all purchase as well as cash and ATM transactions.
6) ANYONE should be able to contact authorities if they suspect an elderly person is the victim of financial abuse. Tips can be anonymous. Law enforcement WILL investigate any reports of suspected financial abuse.
Thank you for reading this. We all hope you will act promptly to protect our elderly citizens from financial abuse.
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