	Elder Financial Exploitation Can Take Many Forms

Older adults are being financially exploited by strangers who inundate  them with mail, telephone, or Internet scams; unscrupulous financial  services providers; and untrustworthy in-home caregivers (see table 1 for  more details). For example:
Mass marketing scams: Local law enforcement authorities in the four  states we visited indicated that investigating and prosecuting the  growing number of cases involving interstate and international mass  marketing fraud, which often targets older adults, is particularly  difficult for them. Interstate or international mass marketing scams  include “grandparent scams,” which persuade victims to wire money  to bail “grandchildren” out of jail or pay their expenses, and foreign  lottery scams that require victims to pay sizeable sums before they  can receive their winnings. Exploitation by financial services professionals: Older adults may  consult with a variety of financial professionals, such as financial  planners, broker-dealers, and insurance agents. However, older  adults, similar to other consumers, may lack the information to make  sound decisions about choosing a financial services provider and  protecting their assets from exploitation. Exploitation by in-home caregivers: Local officials cited exploitation by  in-home caregivers—who range from personal care aides who  provide non-medical assistance to home health aides who may check  an older adult’s vital signs—as a type of abuse that is difficult to  prevent, in part because these older adults may rely on and trust their  caregivers. Federal Agencies Are Helping States Combat Exploitation in Various Ways

We identified a number of ways the federal government was supporting or  could further support state and local efforts to combat elder financial  exploitation. Local law enforcement officials we met with indicated it is not clear how  they should obtain the federal support they need to respond to interstate  and international mass marketing fraud cases. In  our November 2012 report, we recommended that the Attorney General  conduct outreach to state and local law enforcement agencies to clarify  the process for contacting the federal government in these cases and the  ways in which the federal government could provide support. Federal agencies have made some efforts to provide safeguards to  prevent exploitation by financial services professionals, which was cited  as a challenge by public officials in all four states we visited. This program  provides grants to states to conduct background checks for employees of  long-term care facilities and providers, such as home health agencies and  personal care service providers. Other federal efforts are broader in scope rather than focusing on a  particular type of elder financial exploitation, such as those covering  public awareness, banks, collaboration among agencies, and data  collection. At the federal level, each of the seven federal  agencies we reviewed independently produces educational materials that  could help prevent elder financial exploitation. In our  November 2012 report, we recommended that the federal government  take a more strategic approach to its efforts to increase public awareness  of elder financial exploitation. Our November 2012 report recommended that CFPB develop  a plan to educate bank staff on elder financial exploitation. Yet due to the nature of elder  financial exploitation, collaboration can be an effective means to facilitate  case investigation and prosecution. We identified a number of local  initiatives to help bridge the gap between social services and criminal  justice agencies. We maintain the  importance of our recommendation to FTC. However, preventing and responding to elder financial exploitation also  calls for a more cohesive and deliberate national strategy. This is an  opportune time for the federal government to be looking at elder financial  exploitation, because the Elder Justice Act of 2009 has established the  Elder Justice Coordinating Council (EJCC)—a group of federal agency  heads charged with setting priorities, coordinating federal efforts, and  recommending actions to ensure elder justice nationwide—which has  recently begun to examine these issues. To this end, in our  November 2012 report we recommended that the EJCC develop a written  national strategy for combating elder financial exploitation.
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. GAO was asked to testify on the different forms elder financial exploitation can take and the ways federal agencies can help combat it. This testimony is based on information in a report issued in November 2012 (see GAO-13-110). To obtain this information, GAO interviewed public officials in California, Illinois, New York, and Pennsylvania--states that had large elderly populations and initiatives to combat financial exploitation; officials from seven federal agencies; and experts in this field. GAO also reviewed federal strategic plans and other relevant documents, research, laws, and regulations.

What GAO Found

Older adults are being financially exploited by strangers who inundate them with mail, telephone, or Internet scams; unscrupulous financial services professionals; and untrustworthy in-home caregivers. Local law enforcement authorities in the four states GAO visited indicated that investigating and prosecuting the growing number of cases involving interstate and international mass marketing fraud--such as "grandparent scams," which persuade victims to wire money to bail "grandchildren" out of jail or pay their expenses--is particularly difficult. In addition, older adults, like other consumers, may lack the information needed to make sound decisions when choosing a financial services provider. As a result, they can unknowingly risk financial exploitation by those who use questionable tactics to market unsuitable or illegal financial products. Local officials also noted that it is difficult to prevent exploitation by in-home caregivers, such as home health or personal care aides, individuals older adults must rely on.
GAO identified several ways the federal government is, or could be, supporting state and local efforts to combat elder financial exploitation.
With regard to mass marketing scams, GAO has recommended that the Department of Justice reach out to law enforcement authorities in states to clarify how they can obtain the federal assistance needed to handle interstate or international mass marketing fraud.
To help prevent exploitation by financial services professionals, the Securities and Exchange Commission links to a public website where the qualifications of individual financial services providers can be found, and the Consumer Financial Protection Bureau has issued guidance on how best to convey this information to older adults.
To prevent exploitation by in-home caregivers, the Centers for Medicare and Medicaid Services provides grants that fund background checks for employees of agencies that provide these services.
Other federal efforts are broader in scope and help combat all types of elder financial exploitation. For example, each of the seven federal agencies GAO reviewed has independently undertaken activities to increase public awareness of this exploitation; however, GAO has recommended that the federal government develop a more strategic approach to these efforts. Further, recognizing the importance of collaboration among those interacting with older adults, GAO has recommended measures to educate bank staff on how to identify potential exploitation and improve collaboration among social service and law enforcement agencies, among others, as they respond to reports of exploitation. GAO has also noted the need for more data on the extent and nature of elder financial exploitation, some of which can be collected from consumer complaints filed with federal agencies. Finally, preventing and responding to elder financial exploitation calls for a more cohesive and deliberate national strategy. To this end, GAO has recommended that the Elder Justice Coordinating Council--a group of federal agency heads charged with setting priorities and coordinating federal efforts to combat elder abuse nationwide--develop a written national strategy for combating elder financial exploitation.

What GAO Recommends

In its November 2012 report, GAO made multiple recommendations to federal agencies, and the agencies generally agreed with the recommendations.