Several financial regulators, including the SEC, the CFTC, the FTC and the CFPB recently issued joint guidance clarifying that advisers and brokers, among others, may alert the authorities about suspected elder abuse without running afoul of the privacy obligations of the Graham-Leach Bliley Act (GLBA).
The joint efforts by the regulators come at an opportune time to stem the epidemic. I “googled” the statistics, and I was horrified by what I found. Five million older adults are subject to some form of abuse every year, the National Center of Elder Abuse estimates. Recent studies suggest that financial exploitation is the most common form of abuse. The vast majority of cases go unreported.
Under the GLBA, a financial institution is not permitted to disclose nonpublic personal information about a consumer to a third party unless it first provides notice and the opportunity to opt out. The guidance points out that the GLBA has several exceptions though and that the disclosure of non-public personal information about consumers to government agencies for the purpose of reporting suspected financial abuse of older adults will fall within one or more exceptions.
It is imperative that employees recognize possible signs of abuse. The Department of the Treasury’s Financial Crime Enforcement Network (FinCEN) published an advisory that describes telltale signs that may trigger the filing of a report, such as erratic transactions, a change in patters or suspicious interactions between older adults and caregivers. I would urge financial institutions to educate employees about the signs. They may play a key role in preventing and detecting financial abuse of an ever-growing older population.
More information about the use of suspicious activity reports (SARs) to report suspected financial exploitation is available in FinCEN’s “The SAR Activity Review” that was published in May 2013. Money Smart for Older Adults is a useful financial resource tool for anyone interested in raising public awareness among older adults and caregivers.