By: Shannon Basile, Compliance Analyst
The Consumer Financial Protection Bureau (CFPB) released a new Elder Financial Exploitation (EFE) report and advisory based on data collected from Suspicious Activity Reports (SARs) filed from 2013 through 2017. Some of the report findings include:
• Elder financial exploitation SAR filings have quadrupled from 2013 to 2017. In 2017, EFE SARs totaled 63,500 but actual EFE events is likely higher based on undiscovered or reported EFE;
• In 2016, money service businesses surpassed depository institution SAR filings and in 2017 totaled 58% of all EFE SAR filings;
• In 2017, financial institutions reported a total of $1.7 billion in suspicious activities;
• One third of the individuals who lost money were over 80 years old and adults ages 70 to 79 had the highest average monetary loss ($45,300);
• Losses were greater in cases where the victim knew the suspect;
• Financial institutions reported an array of crimes including 27% involving stranger scams;
• More than half of the EFE SARs involved a money transfer; and
• The suspicious activity took place over a four-month period.
The CFPB also included an advisory section to help financial institutions develop procedures to prevent monetary losses as a result of EFE. Suggestions include:
• Ensure all staff is trained on how to detect and report suspected EFE to the proper law enforcement agency, including adult protective services in addition to filing a SAR;
• Make sure staff is aware of current scam and fraud trends;
• Improve fraud detection through the use of technology to monitor and detect typical fraud transaction patterns; and
• Find ways to work with law enforcement by providing data and block or stall suspected fraudulent transactions.
Illinois state-chartered credit unions have already implemented some of the CFPB’s financial institution advisory suggestions thanks to past amendments of Section 10 of the Illinois Credit Union Act. The amendments allow Illinois state-chartered credit unions to provide information to law enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies regarding a suspicion that a member who is an elderly person has been or may become a victim of financial exploitation. Section 271.120 of the Illinois Administrative Code requires Illinois credit unions to ensure employees and officers with direct member contact complete financial exploitation of the elderly training within 6 months of being hired and receive refresher training every three years thereafter.
Federal credit unions are provided protection when releasing information regarding suspected exploitation of the elderly to a covered agency based on exceptions in Section 502 of the Gramm-Leach-Bliley Act and Section 303(2) of the Economic Growth, Regulatory Relief, and Consumer Protection Act as long as the training requirements are met.
ICUL will host the B-SAFE Certification/Re-Certification training during the Fraud Peer Networking Meeting on May 17, 2019. Click here for details.