The Financial Crimes Enforcement Network (FinCEN), has issued Advisory FIN-2011-A003 notifying the financial industry to be aware of warning signs of potential elder financial exploitation.  Due to familiarity that bank personnel often have with senior clientele, FinCEN, is reminding institutions that they can play a key role in reporting signs of abuse.

As some older Americans become more reliant on assistance from caretakers due to declining mental or physical capacities, they become particularly vulnerable to theft, embezzlement, and fraudulent schemes.  Accordingly, the Advisory encourages bank personnel to be aware of common red flags that are indicators potential abuse.  Additionally, the alert advises them to be conscious of anomalous activity by older clients that could provide cause to initiate a review of customer activity.


The list of red flags noted in the Advisory, include:

• Erratic or unusual banking transactions, or changes in banking patterns:

  • Frequent large withdrawals, including daily maximum currency withdrawals from an ATM;
  • Sudden Non-Sufficient Fund activity;
  • Uncharacteristic nonpayment for services, which may indicate a loss of funds or access to funds;
  • Debit transactions that are inconsistent for the elder;
  • Uncharacteristic attempts to wire large sums of money;
  • Closing of CDs or accounts without regard to penalties.

• Interactions with customers or caregivers:

  • A caregiver or other individual shows excessive interest in the elder’s finances or assets, does not allow the elder to speak for himself, or is reluctant to leave the elder’s side during conversations;
  • The elder shows an unusual degree of fear or submissiveness toward a caregiver, or expresses a fear of eviction or nursing home placement if money is not given to a caretaker;
  • The financial institution is unable to speak directly with the elder, despite repeated attempts to contact him or her;
  • A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the elder without proper documentation;The customer moves away from existing relationships and toward new associations with other “friends” or strangers;
  • The elderly individual’s financial management changes suddenly, such as through a change of power of attorney to a different family member or a new individual;
  • The elderly customer lacks knowledge about his or her financial status, or shows a sudden reluctance to discuss financial matters.

In cases where institutions have reasonable cause to believe that financial exploitation may be taking place, they are encouraged to file a Suspicious Activity Report with FinCEN which would lead to law enforcement investigation into the activity.

The Advisory did not indicate any specific fraudulent activity that led to the timing of this announcement.  "Elder abuse in any form is intolerable," James H. Freis, Jr., FinCEN Director said.  "Working with feedback from financial institutions, FinCEN developed this new red flags tool as a way for depository institutions in particular to combat elder financial exploitation."