From the U.S. Government Accountability Office, www.gao.gov

Transcript for: AskGAOLive Chat on Elder Financial Abuse

Description: Online video chat with Kay Brown, Director, Education,
Workforce and Income Security

Related GAO Work: GAO-13-110: Elder Justice: National Strategy Needed to
Effectively Combat Elder Financial Exploitation

Released: November 2012

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>> Alright, I want to welcome everyone to AskGAOLive or GAO, the
Government Accountability Office's streaming video chat project.  Thank
you for tuning in.  We really appreciate you taking the time to join us
today.  I'm here with Kay Brown, a director in GAO's Education Workforce
and Income Security Team.  We're going to be talking about financial
exploitation of older Americans and the recent work that GAO has done on
that.  My name is Jeremy Cluchey.  I'm in our Office of Public Affairs. 
And the report that I mentioned that Kay's team released last week is
GAO-13-11..excuse me, -110.  It's available on our website, GAO.gov,
right on the front page.  If you scroll down a bit you can see it came
out on Thursday, so if you need some context, you can find the report
there.  I also want to talk, before we get started, about how you can
submit questions.  We've gotten a few questions over email already. 
That address is askgaolive@gao.gov.  Feel free throughout the chat to
send your thoughts and questions to that email address and we'll do our
best to get you a response.  If you're on social media you can also
submit questions via Twitter.  Use the hashtag askGAOlive and we'll be
keeping an eye on those tweets as well so that's another great way to
submit a question.  So now Kay, turn to you and thank you again for
joining us.

>> Kay Brown:  My pleasure.

>> Jeremy Cluchey:  To start off I'm just hoping that you can give us
some brief background on you and your work at GAO.

>> Kay Brown:  Okay, I'm Kay Brown.  I'm a director in GAO's Education
Workforce and Income Security team, as Jeremy said.  I've worked at GAO
for about 20 years and all of that time my focus has been on making
government work better for services for vulnerable populations.

>> Jeremy Cluchey:  Great, thanks.  And so now diving into our topic
today, financial exploitation of older Americans, can you give us an
introduction to this topic and also GAOs work on it?

>> Kay Brown:  Sure.  About a year and a half ago we issued a report on
elder abuse that included both all of the different types of abuse
ranging from physical abuse, psychological, sexual, neglect, and elder
financial exploitation.  And during that work we decided that the
financial exploitation was a particularly vexing problem so we ended up
doing some additional work on that and that's what our report is about
that was issued just last week.  To be clear on exactly what we're
talking about here, financial exploitation is the illegal or improper
use of an elder person's resources, assets or property.  And it can be
performed by any number of different individuals. It can be people that
the older American trusts such as a homecare giver, even a relative or a
financial advisor.  Or it could be someone that they do not know and it
takes the form of a scam, often a telephone scam, internet scam or an
e-mail or a mail scam.  And this we think is a very serious problem for
a couple of reasons.  One, one of our goals in this country is to allow
older adults to remain in their communities and at home as long as
possible.  And this type of exploitation robs them of not only their
dignity but often their health and their independence. By independence I
mean that sometimes they can lose all of their financial resources and
with this type of exploitation it's rare for them to recover those
resources.  We don't really know how extensive this is but we found one
study that's an estimate that found that about $2.9 billion was lost
through this type of exploitation in 2010. So it is a serious problem. 
The challenge that we have in trying to review a problem like this is
that it's multifaceted and multilayered.  It covers things that happen
at the local level and the agencies that would be covering it are local,
state, and federal.  And we have a graphic that will demonstrate that
because in addition to those three levels of government, we have three
different types of systems that can be involved in trying to both
identify and address this problem.  The first graphic that you can see
right there covers, if you look at it, starting at 12:00, Consumer
protection, that's one of the systems involved.  Then you move on to
Criminal justice, and Social services.  Now those three systems have
agencies that are involved at the state and local level, which is our
next graphic.  And, as you can see starting at 12:00 again, you see that
the consumer protection is covered by the state insurance, banking, and
securities regulators.  Criminal justice can involve state and local law
enforcement agencies, district attorney's offices, the state court, and
state attorneys general.  In addition, social services can...are
primarily covered by the adult protective services offices which are
found in each community and then the state units on aging.  And you
might be familiar with those because they're the offices that are often
called the AAAs or the area agencies on aging that deliver broader
social services to older adults.  On the federal level we have a number
of different agencies that also cover the three different systems. 
Starting with consumer protections, again we have the new Consumer
Financial Protection Bureau and that's the only unit in the federal
government that actually has an office whose explicit job is to deal
with this kind of problem.  It's called the Office of Financial
Protection for Older Americans.  There's also the Federal Trade
Commission, the Securities and Exchange Commission, and the Department
of Treasury.  For criminal justice at the federal level you'll see of
course there's the Department of Justice but also the Postal Inspection
Service because many of the scams are conducted through the mail. And
then on the Social Services side at the Department of Health and Human
Services there is the Administration on Aging.  So as you can see it's a
multilayered problem both in levels of government and in systems and
many, many agencies are involved, which is why we thought it would be
important for us to take a look at it.

>> Jeremy Cluchey:  Thanks, Kay.  To provide some contacts on this
phenomenon, I hope we can talk a little bit about why older adults
frequently are targeted for exploitation in these cases?

>> Kay Brown:  Well there's two primary reasons.  One is that older
adults often have more resources.  They've had their whole life to save
their resources and are preparing or using it in their retirement.  The
second reason is as we age our capacity to be able to identify fraud and
manage our resources diminishes and so these older adults make good
targets, frankly.

>> Jeremy Cluchey:  We have a question here from John.  This came in
over email.  Rather he sent in a story about financial exploitation and
it raises a good question, which is how can professionals be held
responsible in cases of elder abuse?  And who can a concerned person
contact when they suspect abuse?

>> Kay Brown:  That's a good question, John.  And of course as you can
tell from the graphics that we showed, there are many different places
where you could go to try to report some type of abuse like this.  It
kind of depends on the kind of abuse that you're talking about.  But one
place to start is always your local adult protective services office. 
And if you scroll down below the image on your screen right now you'll
see that we have a website there that you can refer to that has, it will
take you to contacts for the adult protective services offices in every
state.  Now as far as how professionals can be held accountable, we've
seen examples where different professionals have actually lost their
license.  It might have been an insurance regulator who was found to
have conducted some type of improper or illegal exploitation or it might
have been some type of financial advisor.  But there are situations
where people actually do lose their licenses.  I have to say though that
one of the things that we found is that it's difficult to have these
cases go through the criminal justice system for a couple of reasons. 
At the local level, if they're a simple case and it's a known
perpetrator it would be very possible that the law enforcement and the
local district attorney or courts would be willing to step in and try to
bring something like this to court.  If it's a larger problem that
involves something like scams that cross over between states or even
international scams, it's much harder for the local jurisdictions to be
able to cope with that.  And what they end up doing is referring it to
the federal level.  And at the federal level this type of infraction may
or may not rise to the level that is serious enough for one of the
federal agencies like the Department of Justice to take it on.  So it
does...sometimes there are some cases that are caught in a kind of
limbo.  We have some recommendations that I could talk about later as
far as how that might be fixed.

>> Jeremy Cluchey:  Thanks.  Can you talk a little bit about the
difference between the roles that state and local government versus the
federal government play when it comes to this issue?

>> Kay Brown:  Well the state, technically the responsibility for
protecting older adults lies with the state and local jurisdictions. 
The federal government has a different kind of role when we have these
types of programs that are really state and local programs.  In these
types of cases, federal agencies are intended to support and provide
assistance and in some cases help with identifying best practices and
things like that for the states and locals.  In this type of work we
actually identified seven different federal agencies that have a role in
supporting or providing information to the states and local
jurisdictions on elder financial exploitation or, as I mentioned,
sometimes bringing some of the larger cases to trial.

>> Jeremy Cluchey:  We've received a number of questions so far, two in
particular from Latiffa and Carol and these are related to abuse of
guardianship powers.  I know this report touches on that issue.  Can you
talk about that in a little more detail?

>> Kay Brown:  Right, this report touches on issues with guardianship
and we also have several other reports that explicitly focus on
guardianship that if you go to the GAO website and search on
guardianship you'll be able to find those reports.  The main challenge
with guardianship for us, because we work for Congress and can address
recommendations to the federal agencies, is that guardians are appointed
by state courts.  And we have studied this problem and we know that
first of all guardians can play very, very important roles in protecting
older, vulnerable individuals or others who don't have the capacity to
make financial decisions.  However unfortunately there are situations
where guardians do abuse their powers and we've talked in the past about
the need for state courts to be perhaps more careful in how they're
selecting their guardians and to do more careful monitoring of how
guardians are performing.  In the case of this report, what we're
talking about is a couple things, one, background checks.  Background
checks can be a helpful tool.  They're not 100 percent foolproof but we
have suggested that courts may want to take a look at doing a more
thorough background check before they appoint someone as a guardian. 
The other thing from the federal perspective is we know that with people
who receive benefits from things like the Social Security Administration
or if they receive Veterans Benefits, often if they are determined
incapacitated to handle their own finances, they're assigned someone
called a representative payee that receives those benefits for them and
manages the accounts.  One of the things that we've recommended in past
reports is that the federal government figure out a way to deal...to
share information more directly with the courts on situations where they
already know that a representative payee may not be fulfilling their
fiduciary responsibilities and might not make a very good guardian.  We
think it would be helpful if the state courts would know about those
individuals so they could avoid appointing them as guardians.

>> Jeremy Cluchey:  How does guardianship differ from power of attorney?

>> Kay Brown:  A power of attorney is something that is much more easy
to achieve.  An individual can appoint someone to have power of attorney
over their finances and their other doings and it can be accomplished
through a notary public.  And one of the things that we learned in this
work was that power of attorney can be improperly obtained without the
knowledge or permission of the individual and it can also be more easily
abused.  There are fewer controls on the backgrounds, the kind of people
that might have power of attorney and we've found a number of cases
where that power has been abused.

>> Jeremy Cluchey:  In the report, continuing to talk about power of
attorney, you share an idea for how the federal government could help
states deal with this power of attorney issue.  Can you talk about that
recommendation a little more detail, that suggestion?

>> Kay Brown:  Yeah there's a unit that develops model laws and in this
particular case they have a model power of attorney law that they've
suggested.  And we have a couple different ways that we think the
federal government could help with that.  The administration on aging is
actually doing training through one of its contractors to help states
figure out ways to implement this type of model law or something like
it.  And the advantages of a law like this is it has built in controls
to try to reign in people who might be abusing their power of attorney
privileges.  For example, there might be a situation where there would
be two people that would be sharing some responsibility so one could
oversee the other.  There's also types of suggestions for what kinds of
checks to do before you appoint someone as power of attorney.

>> Jeremy Cluchey:  Thanks for that.  We have a question here over email
from Scott.  He asks whether criminal background checks on non-familial
caregivers make a difference.

>> Kay Brown:  Well as I said earlier, background checks are not a
panacea, they're not a guarantee but they certainly are a good place to
start.  And one of the things that we've learned is that their
background checks are more effective when they are conducted at
different levels of government, and by that I mean that there are
criminal databases that are at the state level and at the federal level
and there's also information at the local level.  So in order to have a
thorough background check it would be advisable to be able to cover all
of those different levels of criminal databases.  It's possible for
someone to move from one state to another and not be found in the
state's database but have their crimes be present in the federal
database.

>> Jeremy Cluchey:  Thank you.  The reports seem to break it down by
efforts to prevent abuse and then efforts to address it after the fact.

>> Kay Brown:  Right.

>> Jeremy Cluchey:  Can you talk in particular about prevention and some
of the ways the agencies are trying to prevent this before it happens?

>> Kay Brown: Right.  Well I think the first thing about prevention is
that prevention is really the best answer to this.  It's very, very
hard, as I said earlier, to recover funds when they have been lost or in
the cases of international or interstate scams, it's very hard to bring
those people to justice.  So the most important thing that we've
mentioned for prevention is public awareness and public education.  And
we think the federal government is very well positioned to be able to
lead a campaign like this.  When we talked to state and local agencies
they said yes, we think public awareness is really important but we
really don't have the resources to do this.  Our budgets have been cut
and we're pretty much spending all of our time and resources in just
trying to cope with the problems that we're dealing with now.  On the
federal level what we found was that all of the seven agencies that we
identified all had some type of public education effort but it was
specifically focused on their mission.  And we believe that if there was
a more coordinated effort across these different agencies it would be
more efficient, first of all.  And secondly we think it would be more
effective if it was done centrally, or coordinated at least centrally,
by the federal government so that it would have a much wider reach.

>> Jeremy Cluchey:  Then on the sort of flipside, I guess of that, with
prevention on one side and response on the other, can you sort of give
the same background in terms of how different agencies respond?

>> Kay Brown:  Well the response, there's a couple of different things
that we were talking about in the response section and one was the
international and interstate crimes and I've already talked a little
about that so maybe I can talk a little bit about banks right now. One
of the things that we found was that banks can be a very, very important
resource for identifying potential financial exploitation and reporting
it and also providing evidence if needed.  And this is really very
useful for older adults because many older adults continue to go in to
their local banks and have a relationship with the people in their
banks.  And it's not unusual for a bank teller to know the person
personally and they would be in a good position to know, oh, this person
is withdrawing very significant or large amounts of money that they
haven't done in the past or they're accompanied by someone that I
haven't seen before and maybe they're feeling a little bit of pressure
or indicating that they're feeling some pressure as they withdraw funds. 
So we think the banks can be a very valuable resource in helping to both
prevent and address elder financial exploitation.  I do want to say one
more thing about the banks and that's that we found that a number of
banks do some training on being able to identify this type, the types of
situations that I was talking about but we think that there could be
more done in that area and that's one of the recommendations we've made
in this report.  And we also noticed and heard that many banks are
reluctant to provide information because they have this sort of tension
between their belief that they're there to serve the customer and
protect their privacy and at the same time they may have a feeling that
something is going awry with this person's banking practices.  And
sometimes banks believe that they are prohibited from sharing this type
of information because of federal privacy laws.  And we have determined
that the federal privacy laws don't prevent banks from sharing that type
of information with adult protective services and law enforcement
agencies and that's another one of the recommendations that we made in
this report is that the consumer financial protection bureau spend some
time helping both to develop more training programs but also to helping
assure banks that it's okay for them to release that information.

>> Jeremy Cluchey:  You mentioned recommendations in this report and
there's also a recommendation that deals with requiring the victims age
in complaints.  Can you elaborate on that?

>> Kay Brown:  Right.  There are a couple different federal databases
that give us some indication about the extent of this problem.  But both
of these databases, one is through the Federal Trade Commission and one
is in Treasury and it is the Financial - FINCEN, yes, thank you and so
both of these databases are broader than elder exploitation.  They
collect crimes on many different types of, both anything from internet
crimes to financial, potential financial crimes and many things are
reported to them.  And one of those databases is starting to collect
information on whether that type of suspected crime or complaint
involves older adults and we are recommending that the other database
also take steps to do that.  We think that will help us to be able to
get a better feel about the extent to which these complaints are
involving older adults.  And any time we have more information that's
going to allow the federal agencies to have a better handle on the types
of crimes that are committed and patterns that are involved, different
jurisdictions that are involved and that will help them with both
prevention and response efforts.

>> Jeremy Cluchey:  We have a question here from Carol, came in over
email, and she asks what can individuals do to help affect change and
stop exploitation?

>> Kay Brown:  Good question, one of the things that's important is to
pay attention and if you see something that you think is exploitation
refer it, report it.  The Adult Protective Services Agencies in any area
are places to start with any type of suspected elder abuse.  And in
addition to that, of course, you can go to local law enforcement
agencies as well.  One thing to remember if you're reluctant is that
most states have a provision in law that gives people some kind of
assurance that if they're reporting in good faith they will be held
harmless for that so that if you report something and it turns out not
to be exactly what you thought, you will not be held liable for that. 
Most states have protections like that in place.

>> Jeremy Cluchey:  That's really helpful and I think probably a good
place to leave it for this chat.  I want to thank you, Kay, for taking
the time to sit down with us and answer these questions.

>> Kay Brown:  You're welcome, thank you for such good questions.

>> Jeremy Cluchey:  Yes, they were great questions.  Thanks to everyone
who submitted questions over email.  We have, this is, I believe, our
fifth chat that we've done.  We're looking to, you know, improve the
format as we go so if you have suggestions or feedback about how we can
do that, if you could send those in to askgaolive@gao.gov we would
really appreciate it.  For more from the Government Accountability
Office you can always go to GAO.gov.  You can follow us on Twitter at
usgao as our handle or on Facebook, Facebook.com/usgao for daily updates
on our work.  And thank you again for tuning in.  I hope to see you here
next time.

>> Kay Brown:  Thank you.

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