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N A O M I K A R PS E N I O R P O L I C Y A N A L Y S T / O F F I C E F O R O L D E R A M E R I C A N C O N S U M E R F I N A N C I A L

P R O T E C T I O N B U R E A U

R I C H A R D G O L D B E R GS E N I O R C O U N S E L F O R C O M P L E X L I T I G A T I O N /

U S D E P A R T M E N T O F J U S T I C E C O N S U M E R P R O T E C T I O N B R A N C H

D E I R D R E L O KA S S I S T A N T D I R E C T O R A N D G E N E R A L C O U N S E L / H A R R Y A N D J E A N E T T E

W E I N B E R G C E N T E R F O R E L D E R A B U S E P R E V E N T I O N

Preventing Elder Financial Abuse: Recognizing and Preventing Scams

American Bar Association Senior Lawyer’s Division

Elder Abuse Prevention Task ForceJanuary 19th, 2017

FINANCIAL ABUSE DEFINED

“The illegal, unauthorized, or improper use of an older individual’s resources by a caregiver or other person in a trusting relationship, for the benefit of someone other

than the older individual.

This includes, but is not limited to, depriving an older person of rightful access to, information about, or use of, personal benefits, resources, belongings, or assets.”

- Center for Disease Control and Prevention. (2016). Elder Abuse: Definitions. Retrieved from: https://www.cdc.gov/violenceprevention/elderabuse/definitions.html

2017 The Weinberg Center for Elder Abuse Prevention

FINANCIAL ABUSE: AN EPIDEMIC

1 in 44 cases of financial exploitation is reported by older adults.Under the Radar: NYS Elder Abuse Prevalence Study, 2011

Annual financial loss by victims of elder financial abuse is estimated to be at least $2.9 billion dollars. The MetLife Study of Elder Financial Abuse, 2011

2.6 million adults over age 65 were victims of identity theft in 2014. Bureau of Justice Statistics National Crime Victimization Survey

Seniors with cognitive incapacity suffer greater economic loss.Department of Justice- Elder Justice Initiative

2017 The Weinberg Center for Elder Abuse Prevention

TYPES OF ELDER FINANCIAL ABUSE

Taking money or property Using the property or possessions

without permission Denying access to finances or property Forging a signature Promising care in exchange for money or

property and not keeping promise

Power of Attorney abuse Stealing an older adult’s identity Using deception, coercion, or undue

influence to persuade an older adult to sign a deed or will

Scams

2017 The Weinberg Center for Elder Abuse Prevention

FINANCIAL ABUSE: RED FLAGS

Confusion about finances and transactions Activity deviating from usual banking patterns Requests for additional ATM cards/ first time use of ATM card Opening a joint account, changing power of attorney, changing account beneficiary,

or opening inappropriate investments Sudden property transfers or changes to will New authorized signers on signature card Mail redirected to a new address Checks written out of numerical order Flurry of bounced checks/overdraft fees or low balances Initiating a guardianship proceeding

2017 The Weinberg Center for Elder Abuse Prevention

OTHER RED FLAGS OF ABUSE

Increased social or physical isolation Older adult appears fearful of caregiver or trusted individual Older adult appears unkempt, inappropriately dressed, or malnourished Older adult appears unusually reluctant to respond when spoken to Caregiver or trusted individual appears rough, rude, or negligent

2017 The Weinberg Center for Elder Abuse Prevention

WHY OLDER ADULTS?

Secure and fixed incomes Attractive targets: memory loss physically vulnerable isolated + greater dependency

on others Cognitive changes can result in

greater vulnerability because of decreased recognition in who to trust

WHO ARE THE PERPETRATORS?

Family, friends, neighbors, acquaintances

Professionals including lawyers, doctors, financial advisors, clergy, caregivers, guardians, etc.

Representative Payees Strangers including telemarketers,

door to door sales people, repairmen or women, new romantic partners

2017 The Weinberg Center for Elder Abuse Prevention

LONG-LASTING IMPACT

• For an older adult, financial abuse can have as significant an impact as a violent crime or physical abuse.

• Negatively impacts older adults’ health by reducing resources available for proper housing, good nutrition, medication, and healthy activities.• Hospitalization rate twice as high, even for financial exploitation.• Loss of independence and loss of security. • Loss of time, retirement income, home or residence.

• Elder financial abuse increases rates of mental health issues among elders, such as depression, anxiety, anger, and social isolation.

• Shame.

2017 The Weinberg Center for Elder Abuse Prevention

Preventing Elder Financial Abuse: Recognizing and Preventing ScamsAmerican Bar Association Senior Lawyers Division Webinar – January 19, 2016

This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenter are the presenter’s own and may not represent the Bureau’s views.

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Scam basics

Scams are always changing – this year’s romance or grandparent scam will be followed by new and creative schemes next year

Certain characteristics and warning signs are frequent:

Paying up front for a promised prize

Pressure to act quickly – deal is “only good today”

Pressure to keep it secret until transaction is complete

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Relative in need/grandparent scam

Impostor pretending to be family member calls to say they are in trouble and need you to wire money right away

May plead not to tell family members for fear of upsetting them

Hearing loss may make it hard for older adult to detect differences from grandchild’s voice

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IRS telephone scam

Scammer impersonating IRS tells consumer they owe taxes and must pay or face arrest, jail, driver’s license revocation or deportation

May spoof IRS toll-free number on caller ID

May follow up with call impersonating police or DMV

https://www.irs.gov/uac/tax-scams-consumer-alerts

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Phantom debt collection scam

Phony debt collectors try to trick victims into paying a debt that doesn’t exist

May refuse to answer questions about themselves and the debt

May threaten arrest, physical harm

Suggested responses:

Ask for name, company, address, phone number

Request explanation of debt in writing

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Charity scams

May refuse to provide detailed information about identity, mission, costs, how donation will be used

Fails to provide proof that contribution is tax deductible

Uses high press tactics; asks for cash or wire

www.ftc.gov/charityfraud

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Identity theft

Theft of personal information such as SSN, birth date, credit card numbers, PINs, passwords

Avoiding it: Protect personal information

Protect incoming/outgoing mail

Sign up for direct deposit

Shred

Monitor accounts

Review credit report, report fraudulent activity

Also: medical identity theft

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Scams that target homeowners

Reverse mortgage proceeds fraud

Mortgage assistance rescue scam

Contractor fraud, home improvement scams

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Scams targeting veterans

Pension benefits filing scam – charging fees to prepare or file a claim

Pension advance scam – lump sum buyouts in exchange for monthly pension payments for a period of time

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Reporting scams

Depends on the scam

Local: adult protective services, police/sheriff, BBB

State: office of the attorney general, consumer protection agency

Federal: CFPB, FBI, FTC, USPIS, IRS….

A resource: Elder Abuse Resource Roadmap – Financial www.justice.gov/elderjustice/roadmap

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Money Smart for Older Adults curriculum

An awareness program developed in collaboration with the FDIC.

Content on common issues facing seniors, including how to identify a potential scam or fraud and other forms of exploitation

Curriculum for trainers

Resource Guide available in

bulk at no charge

Available in Spanish

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Role of banks and credit unions

CFPB recommendations to assist banks and credit unions in preventing elder financial abuse and intervening effectively when it occurs

Advisory www.consumerfinance.gov/fi_advisory_elderabuse

Recommendations www.consumerfinance.gov/fi_report_elderabuse

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Contact information and CFPB links

Contact me: Naomi Karp – naomi.karp@cfpb.gov

CFPB website: www.consumerfinance.gov

Submitting a complaint to CFPB - www.consumerfinance.gov/complaint/

CFPB’s Managing Someone Else’s Money guides –www.consumerfinance.gov/managing-someone-elses-money

CFPB manual for assisted living and nursing facilities on protecting residents from financial exploitation -http://files.consumerfinance.gov/f/201406_cfpb_guide_protecting-residents-from-financial-exploitation.pdf

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Prosecutions of Elder Fraud

Rich GoldbergSenior Counsel for Complex LitigationU.S. Department of JusticeConsumer Protection Branch

RICHARD.GOLDBERG@USDOJ.GOV

The views expressed in this webinar are not necessarily those

of the U.S. Department of Justice and do not constitute legal advice

USDOJ, Consumer Protection BranchHandles large multi-district and international fraud schemes

USDOJ, U.S. Attorney’s OfficesHandle fraud schemes by venue

International Mass-Marketing Fraud Working Group: 8 countriesworking to stop cross-border fraud

Preventing and addressing elder fraud

Focus on means of communication:Mail, Telephone, Internet

Focus on means of payment:Credit, Wire, Stored-value

Solicitations sent to millions

Every day, older Americans receive letters claiming

to bestow benefits on the recipients

in return for a small fee

Sample Mailer

External Envelope

Solicitation

Payment Coupon

Return Envelope

Courtesy of Prevent Mass Mailing Fraud Website Consumer Protection Branch Department of Justice

Sample External Envelopes

Courtesy of Prevent Mass Mailing Fraud Website Consumer Protection Branch Department of Justice

Courtesy of Prevent Mass Mailing Fraud Website Consumer Protection Branch Department of Justice

Courtesy of Prevent Mass Mailing Fraud Website Consumer Protection Branch Department of Justice

Sample Return Envelopes

Pre-Addressed to P.O. Box

Phone calls to thousands

Every day, older Americans receive telephone calls claiming lottery winnings will be received

in return for a fee

More than 100 defendants have been charged23 Federal Districts

2009 – Graham (S.D. Fl.)2012 – Barrett and Barnett (S.D. Fl.)

Led to first extradition2012 – Willocks, et al. (N. Dakota) 2014 – Duffus, et al. (S. Carolina)2014 – Blake, et al. (S.D.N.Y.)

Jamaican lotteryDefendants Charged

OR

NM

UT

CO

WY

MT

AZ

CA

NV

ID

WA

GA

FL

ALMS

LATX

OK

KS

NE

SD

ND

INIL

AR

MO

IA

WI

MN

OH

TN NC

SC

DCMDDE

MENHVT

NY

PA

VAWVKY

NJ

CTRIMA

MI

Defendants’ Status

• 66 sentenced• 20 pled, awaiting sentencing• 14 indicted, awaiting extradition• 8 indicted• 1 awaiting trial• 1 deferral of prosecution

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What you should know:

• No effective fraud scheme “sounds too good to be true”• Talk to seniors: who do they have contact with by mail, phone, in person• Check all bank, credit card, cable, telephone statements in detail• Some schemes specialize in small charges over long periods of timeOnce victimized:• Early intervention is key; before victim becomes wedded to the scheme• Seek help via payment mechanism (e.g., credit card chargebacks)• Seek help from police department, state AG• ALSO report to CFPB (where appropriate) and FTC

Prosecutions of Elder Fraud

Rich GoldbergSenior Counsel for Complex LitigationU.S. Department of JusticeConsumer Protection Branch

RICHARD.GOLDBERG@USDOJ.GOV

THE ATTORNEY’S ROLE

Family Court: Orders of Protection Housing Court: Prevent evictions, negotiate settlements on rent arrears,

enforce rights to repairs Supreme Court: challenge arbitrary decisions affecting benefits and

housing or in Article 81 Guardianship proceedings Administrative hearings: challenge improper terminations of public

housing, denials of SS/SSI or other public benefits, and/or in hearings to obtain appropriate levels of Medicaid for an elder abuse victim or Medicaid funded home attendant care to ensure independent living

2017 The Weinberg Center for Elder Abuse Prevention

CIVIL CAUSES OF ACTION

Utilize Orders to Show Cause Trespass Turnover Proceedings File of Notice of Pendency Liens Intentional Tort Claims Negligence Breach of Fiduciary Duty

2017 The Weinberg Center for Elder Abuse Prevention

RESOURCES

Federal Trade Commission Adult Protective Services Veterans Affairs US Postal Inspection Service Center for Medicaid and Medicare Federal Bureau of Investigation Elder Justice Initiative Federal Resource Roadmap Senior Scam Alert

Elder Abuse Prevention Task Force Scam Sign

2017 The Weinberg Center for Elder Abuse Prevention

2016 The Weinberg Center

2016 The Weinberg Center