U.S. financial firms are reporting rampant financial abuse of their older customers, according to a new report from the U.S. Consumer Financial Protection Bureau (CFPB).
The bureau has published a report that examines trends in the suspicious activity reports (SARs) that are required from various financial institutions, such as banks and credit unions, and certain other businesses.
“SARs indicate that elder financial exploitation is widespread and damaging,” the report says. Its analysis highlights the need for “strong and diverse interventions by financial institutions, law enforcement and social services, as well as the involvement of policymakers,” it says.
The report finds that SAR filings involving suspected financial exploitation of older customers quadrupled between 2013 and 2017, that victims aged 70 to 79 lost an average of US$43,300, and that the average loss was larger (about US$50,000) in cases where the senior knew the suspect, compared with an average loss of about US$17,000 for incidents involving strangers.
Additionally, it finds that less than one-third of these reports indicate that the financial institution referred the incident to authorities, such as adult protective services or law enforcement.
The lack of reporting is a “missed opportunity to increase investigation and prosecution, and to make it more likely that victims will receive appropriate services,” the report says.
It concludes that SARs are a “useful and untapped resource” for monitoring and measuring elder financial exploitation, and, in particular, it recommends that law enforcement use the reports for proactive investigation and prosecution of cases.
“This use of SARs by law enforcement can trigger new investigations, enhance ongoing inquiries and increase prosecutions,” it says.
Finally, the CFPB says that, despite the large increase in reported suspicious activity, the SARs involving seniors “likely represent only a tiny fraction of the actual 3.5 million incidents of elder financial exploitation estimated” to have occurred in 2017.