National Strategy Needed to Effectively Combat Elder Financial Exploitation
GAO-13-110: Published: Nov 15, 2012. Publicly Released: Nov 15, 2012.
What GAO Found
Officials in each of the four states GAO contacted identified the need for more safeguards and public awareness activities to help prevent elder financial exploitation. They also noted that it is difficult to prevent exploitation by individuals such as financial services providers, power of attorney agents, guardians, and paid in-home caregivers. Although states have primary responsibility for combating elder financial exploitation, the federal government could disseminate information on model power of attorney legislation, for example, to help states better safeguard against power of attorney abuse--one type of federal activity authorized under the Older Americans Act of 1965. In addition, experts and state and local officials told GAO that many older adults need more information about what constitutes elder financial exploitation in order to report and avoid it. The seven federal agencies GAO reviewed have undertaken activities to increase public awareness of elder financial exploitation. While some experts observed that a nationwide approach to educating the public is needed, federal public awareness activities are not currently conducted as part of a broader coordinated approach, which GAO believes could help ensure the effective use of federal resources. The Elder Justice Coordinating Council, which held its first meeting in 2012, could be the vehicle for developing and implementing a coordinated national strategy. The Council is composed of officials from federal agencies and is charged with developing national priorities and coordinating federal elder justice activities.
Experts and officials in each state GAO reviewed indicated that difficulty 1) gaining expertise, 2) sustaining collaboration between law enforcement and adult protective services agencies, and 3) obtaining data hinders their response to elder financial exploitation. As with prevention, many federal agencies have individually taken steps to address these challenges that are in line with their own missions. For example, the Department of Justice (Justice) has begun to construct a website that contains training and other materials prosecutors can use to build their expertise in investigating and prosecuting elder abuse, which includes elder financial exploitation. However, there are gaps in federal support in some areas. For example, law enforcement officials in each of the four states GAO reviewed indicated that it is not clear how they should obtain the federal support they need to respond to interstate and international cases. Justice can provide this information, in keeping with its priority to strengthen its relationship with state and local law enforcement. Similarly, the Federal Trade Commission's (FTC) Consumer Sentinel Network database compiles incidents of financial exploitation reported to it by many sources around the country but receives incidents from state government agencies in only 12 states. The database would be of greater use if FTC obtained incidents from more of the states and contained an indicator that the incident involved an older adult.
Why GAO Did This Study
Elder financial exploitation is the illegal or improper use of an older adult's funds or property. It has been described as an epidemic with society-wide repercussions. While combating elder financial exploitation is largely the responsibility of state and local social service, criminal justice, and consumer protection agencies, the federal government has a role to play in this area as well. GAO was asked to review issues related to elder financial exploitation. This report describes the challenges states face in (1) preventing and (2) responding to elder financial exploitation, as well as the actions some federal agencies have taken to help states address these challenges.
To obtain this information, GAO interviewed state and local social service, criminal justice, and consumer protection officials in California, Illinois, New York, and Pennsylvania--states with large elderly populations; officials in seven federal agencies; and various elder abuse experts. GAO also analyzed federal strategic plans and other documents and reviewed relevant research, federal laws and regulations, and state laws.
What GAO Recommends
Federal agencies should develop a written national strategy addressing challenges GAO identified, facilitate case investigation and prosecution, and improve data, among other things. The Consumer Financial Protection Bureau and the Department of Health and Human Services supported GAO's recommendations. FTC did not believe it is necessary to examine the feasibility of requiring victim's age in complaints. GAO maintains the importance of its recommendation.
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Recommendations for Executive Action
Comments: The Elder Justice Coordinating Council has gathered and assessed recommendations from experts and drafted action plans for each the 9 recommendations they prioritized, including identification of involved agencies, current efforts, and next steps. The recommendations included elements that covered: a) identifying and disseminating Information (e.g., Elder Justice Website, successful practices guide to Elder Abuse Forensic Centers, National Resource Center for the Investigation and Prosecution of Elder Abuse, developing screening tools for use across multiple sectors, development of federal elder justice research agenda emphasizing prevention and interventions, development of training for multiple sectors on preventing and responding to elder abuse, development of new models for oversight of fiduciaries and federal-state collaboration); b) coordination of public awareness activities: development of a strategic, multifaceted public awareness campaign with clear and consistent messaging; and c) better data: development of a national APS system modeled after the National Child Abuse and Neglect Data System.
Recommendation: To coordinate and optimize federal efforts to prevent and respond to elder financial exploitation, the Secretary of Department of Health and Human Services (HHS) should, as chairman of the Elder Justice Coordinating Council, direct the Council to develop a written national strategy for combating this problem. This strategy should include a clear statement of its purpose and goals and indicate the roles and responsibilities particular federal agencies should have in implementing it. The strategy could address, among other things, the need to (1) identify and disseminate promising practices and other information nationwide that can be used by state and local agencies to prevent exploitation, educate the public, and help state and local agencies collaborate, investigate, and prosecute elder financial exploitation; (2) ensure coordination of public awareness activities across federal agencies; and (3) collect and disseminate better data nationwide to inform federal, state, and local decisions regarding prevention of and response to elder financial exploitation.
Agency Affected: Department of Health and Human Services
Comments: The Department of Justice is compiling and reviewing potential content for the Elder Justice Website and plans to launch it in the fall of 2013.
Recommendation: To develop expertise among prosecutors and other criminal justice officials, the Attorney General should establish timeframes for and take the steps necessary to launch the elder justice prosecution website that Justice has begun to construct.
Agency Affected: Department of Justice
Comments: Justice held a meeting in December 2012 to begin identifying points of contact both within and outside the department--such as FBI field offices, US Attorneys' offices, stopfraud.gov, the Internet Crime Complaint Center, or FTC's Consumer Sentinel database-- for state and local law enforcement agencies to share information related to elder financial exploitation. They plan to develop an implementation plan and timeline to initiate outreach to the appropriate state and local agencies.
Recommendation: To facilitate investigation and prosecution of interstate and international elder financial exploitation, the Attorney General should conduct outreach to state and local law enforcement agencies to clarify the process for contacting the federal government regarding these cases and the ways in which the federal government could provide support.
Agency Affected: Department of Justice
Comments: CFPB has taken some steps towards implementing a plan to educate banks on how to identify and report potential elder financial exploitation. For example, in June 2013, CFPB, in collaboration with the Federal Deposit Insurance Corporation, released a "Money Smart" curriculum to educate older adults and financial services providers about elder financial exploitation. CFPB has also conferred and shared resources with the Financial Services Roundtable, the Credit Union National Association, and the National Association of Community Development Credit Unions to develop training for financial institution employees. Also, CFPB collaborated with the Financial Crimes Enforcement Network to help provide information about the preparation, use, and utility of Suspicious Activity Reports to financial institutions nationwide. Next, CFPB plans to consider approaches to multimedia training and comprehensive dissemination and outreach to financial institutions nationwide to improve their identification of and response to suspected elder financial exploitation. CFPB has been working to develop guidance for financial institutions to clarify that the privacy provisions of section 502 of the Gramm-Leach-Bliley Act (GLBA), 15 U.S.C. 6802 (e), generally do not prohibit them from reporting suspected financial abuse to--or responding to requests for personal information from--law enforcement, adult protective services, and other relevant entities. CFPB sought collaboration from 7 other federal agencies with GLBA jurisdiction (Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Trade Commission, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. CFPB expects to issue this guidance jointly with the other agencies in fall 2013.
Recommendation: To encourage banks to identify and report suspected elder financial exploitation and to facilitate release of bank records to Adult Protective Services (APS) and law enforcement authorities for investigating this activity, the Director of the Consumer Financial Protection Bureau should (1) develop a plan to educate banks nationwide on how to identify and report possible elder financial exploitation; and (2) develop and disseminate information for banks on the circumstances under which they are permitted, under federal privacy laws, to release relevant bank records to law enforcement and APS agencies.
Agency Affected: Consumer Financial Protection Bureau
Comments: FTC noted that the Consumer Sentinel database provides law enforcement with access to millions of consumer complaints. FTC added that the database has no required fields, and believes that if consumers were required to provide detailed personal information as a condition to filing a complaint, they might refuse to do so, thereby decreasing the overall effectiveness of the system. GAO continues to believe that, given the potential for this database to support and enhance state and local law enforcement agencies? response to elder financial exploitation, FTC should study the feasibility of requiring that all complaints to the Consumer Sentinel database include the victim?s age or another indicator of whether the complaint involves elder financial exploitation. In doing so, FTC can examine different options, including the use of a check box similar to the one that FinCEN has included in its SARs.
Recommendation: To increase the usefulness of data from the Consumer Sentinel Network database for federal, state, and local investigation and prosecution of elder financial exploitation, the Chairman of the Federal Trade Commission should (1) take additional steps to encourage more state and local law enforcement authorities nationwide to report to the Consumer Sentinel relevant individual complaints they receive of elder financial exploitation and to encourage and enable these authorities to query the system; and (2) study the feasibility of requiring that all complaints to the Consumer Sentinel include either the victim's age or an indication of whether the complaint involves elder financial exploitation.
Agency Affected: Federal Trade Commission