Compliance: CFPB releases Elder Financial Exploitation report

March 25, 2019

The Consumer Financial Protection Bureau (CFPB) released a new Elder Financial Exploitation (EFE) report this month, based on data obtained from Suspicious Activity Reports (SARs) filed between 2013 and 2017.

The CFPB will conduct a webinar April 9 highlighting the findings of the report and providing facts, trends and patterns revealed in SARs filed by credit unions and other financial services providers.

Highlights of the report include:

  • EFE SARs increased by more than four times in the 2013 to 2017 period, with a total of over 63,500 such SARs filed in 2017;
  • Financial institutions reported $6 billion in actual and attempted losses;
  • A monetary loss was more common, and the amount lost greater when the older adult knew the suspect, particularly when the suspect was a fiduciary, such as an agent under a power of attorney, guardians of property, trustees and government benefit fiduciaries;
  • Depository institutions reported that 27% of EFE reported were due to scams, and 64% were due to people known to the older adult; and
  • In more than half (52%) of the EFE SARs analyzed for this report, the targeted person used a money transfer, 44% used a checking or savings account and 9% used a credit card.

The CFPB notes that depository institutions can prevent and limit losses due to EFE by focusing more effort on:

  • Improving fraud detection technology to reflect transaction patterns most prevalent when older account holders become victims;
  • Utilizing machine learning to obtain specific and timely information indicating such fraudulent activity;
  • In addition to filing EFE SARs, reporting suspected EFE to relevant law enforcement agencies, which can increase investigation and prosecution;
  • Working collaboratively with local law enforcement and other service providers through community response networks;
  • Working collaboratively with regulators and policymakers to identify and consider any changes needed to enable depository institutions to hold transactions while investigating suspicious activity, for example, establish time frames for the transaction holds and provide immunity for institutions and staff who take protective steps;
  • Promote use of alerts on checking and savings accounts; and
  • Offer services to enable trusted relatives and friends to help detect EFE.

In addition to the CompBlogCUNA’s Compliance Community contains discussion boards and a number of other resources for credit union compliance professionals around the country.