And who says our government can’t co-exist and even work closely from one agency to another? The Consumer Financial Protection Bureau, or CFPB, has been moving mountains since it was founded three years ago as part of the new CARD Act, signed into law by President Obama. Since then, the agency has consistently improved the way consumers go about the business of running their finances. It’s been significant and it’s been impressive.
Perhaps one of the crowning glories came earlier this month. In a massive multi-government agency approach, including the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency and the Securities and Exchange Commission, new guidelines have been issued that address financial exploitation of older Americans.
Elder financial abuse remains a fast growing problem in the U.S. Many are unscrupulous financial professionals, others may be dishonest family members and of course, the complete stranger plays a role. Senior financial abuse spans a broad spectrum, the only common denominator being seniors of all income levels.
“One of the dilemmas we have right now is pensions have all but disappeared from American life,” says Susan Fulton, founder of FBB Capital Partners. “An increasing percentage of elderly people are faced with lump sum distributions and are then thrown to the wolves. Because of that, there’s a level of anxiety and when people are anxious they do not make good decisions.”
In Vermont, one of the most alarming facets of elder financial abuse in Essex Junction Vermont is the inability to recognize scams until it’s too late. According to a study by MetLife, 51 percent of the fraud cases in 2011 were done by strangers with clever methods of thieving from vulnerable seniors. What’s worse is that not only is this the most common form of elder abuse, but only a small percentage of these incidents are even reported.
For elder care lawyers, it presents an opportunity to really stress the importance of choosing wisely who their clients select when it comes to guardians and powers of attorney. These are crucial decisions and can truly affect their quality of life, especially considering how few actually report scams to the authorities.
Because so many senior citizens are vulnerable, it provides a perfect environment for those wishing to cause financial harm. Too often, these scammers discover isolation, cognitive decline, physical inabilities, health problems and even grief after having lost a spouse, sibling or close friend. It’s the perfect storm, so to speak, and can make their efforts easy.
The CFPB Role
As a result of this multi-agency effort, new suggestions to stop elder financial abuse include the sharing of nonpublic personal information when it appears fraudulent efforts are being made against a senior citizen. This would essentially take the burden off of the senior citizen when it comes to reporting and then acting on illegal efforts of others. The first line of defense is often the bank, but due to privacy laws, their hands are essentially tied due to the way the laws are currently written.
The new laws would make it acceptable to disclose personal information to law enforcement, which could serve a number of roles. It would allow those trying to perpetrate fraud less opportunities for success, it would alert the family and that could allow elder law attorneys the opportunity to work with their clients to solidify their financial planning efforts.
While none of this will happen overnight, what the CFPB has done thus far is more than what we’ve seen in decades and could essentially put into place far better protective mechanisms.