Helping Alabama’s Seniors Combat
Financial Fraud, Abuse and Victimization
By Clint Niemeyer, Public Information Specialist
Alabama Securities Commission
More than any other segment of the U.S. population, our state and nation’s senior citizens are attractive targets for scams and financial exploitation by unscrupulous financial predators. Studies reveal that financial exploitation of seniors costs more than $2.9 billion per year, and for each case of elder financial abuse or exploitation reported to authorities, an estimated four or more cases go unreported. As they age, some seniors’ abilities to make financial decisions may diminish, impeding their communication abilities and limiting their ability to properly manage their personal financial affairs. These changes make them more susceptible to taking potentially risky financial chances.
For every dollar seniors lose to financial fraud and abuse, there are related monetary and psychological consequences to be endured by the victims, their families and the social and medical support networks that may be helping take care of them. Medical professionals and other health care providers may see increased physical and emotional stress, requiring more frequent intervention by social service and mental health providers.
The Alabama Securities Commission (ASC), together with the Washington, D.C.-based Investor Protection Trust (IPT), The North American Securities Administrators Association (NASAA), the National Adult Protective Services Association (NAPSA), the American Academy of Family Physicians and the Baylor University College of Medicine, joined forces in 2012 to promote the Elder Investment Fraud and Financial Exploitation (EIFFE) prevention campaign in Alabama. Launched to coincide with the observance of the annual World Elder Abuse Awareness Day (WEAAD), the Alabama EIFFE campaign’s goal is to detect and defeat elder financial frauds before damage can be done. By improving communication among medical and adult protective service professionals with their older, at-risk patients, their adult children and other caregivers, early recognition of danger signs could be invaluable diagnostic tool for detecting and combatting possible financial abuse, particularly for those seniors with mild cognitive impairment. Suspected abuses would then be referred to the ASC and adult protective service providers for further actions.
The EIFFE campaign represents a medically-based, front-line approach for physicians, nurses and other healthcare professionals to use their clinical observation skills to detect physical, mental or emotional vulnerabilities exhibited by an at-risk elder that might suggest financial abuse. Problems to look for include social isolation, changes in appearance or hygiene, depression or substance abuse, fear, distress, inability to perform activities for daily living (ADLs), the presence of a caregiver or family member who appears excessively protective or dominating, a senior unexpectedly granting power of attorney to an unfamiliar individual, making sudden or unexpected changes to wills, a family caregiver who has threatened to withdraw care unless the senior agrees to give them money, and other notable signs.
Physicians, social workers, eldercare providers and even the elderly individuals themselves are encouraged to ask simple, direct questions if problems are suspected that could lead to financial abuse. These include: does the senior frequently run out of money by the end of the month? Do they frequently regret financial decisions they may have made? Do they have trouble paying bills due to confusion? Are they afraid to make financial decisions? Have they made monetary gifts or loans that are more than they can afford? Are children, grandchildren or other relatives pressuring them for money or is money disappearing from their accounts that they cannot justify or explain?
To learn more about the EIFFE campaign and to download a free copy of the Clinician’s Pocket Guide on Elder Investment Fraud and Financial Exploitation, visit the IPT website, By Clicking Here.
Frequently, financial professionals, such as broker-dealers, investment advisers, agents and other personnel who serve in a supervisory, compliance or legal capacity, are among the first to spot red flags of senior financial abuse. Until recently, those who managed seniors’ investment accounts did not always know how to frame a conversation about any suspicions they may have had, and were concerned about possible legal consequences of taking action.
In April, 2016, The ASC, with valuable assistance from the Alabama Department of Human Resources’ (DHR) Adult Protective Services Division, drafted and promoted the “Protection of Vulnerable Adults from Financial Exploitation Act” (Code of Ala., §8-6-170). The legislation, co-sponsored by Sen. Arthur Orr and Sen. Tim Melson, was combined with a similar House bill sponsored by Rep. Paul Beckman and was signed into law, effective July 1, 2016. The law strives to increase protections for seniors and other vulnerable adults (as defined in Code of Ala., §38-9-2) by clarifying and better aligning the responsibilities of financial professionals, regulators, law enforcement and Adult Protective Services, regarding the reporting of senior financial exploitation.
The law mandates prompt reporting to the ASC and DHR by certain financial professionals, including those who service the financial needs of senior Alabamians, and who have reasonable belief that financial exploitation of a vulnerable adult may have occurred, has been or is being attempted. The financial professionals who, when acting in good faith and exercising reasonable care, would be granted immunity from administrative and civil liability that might otherwise arise when disbursements from a vulnerable adult’s account is delayed when certain qualifying factors are noted or suspected.
Such qualifying factors include suspicious behavior or suspicious account activity. The law targets the wrongful or unauthorized taking, withholding, use, conversion or control of money, assets or property of a vulnerable adult. This definition also includes the misuse of powers of attorney, guardianships or conservatorships of vulnerable adults through deception, intimidation or undue influence in order to deprive that person of the ownership, use, benefit or possession of these things.
The law’s mandatory reporting requirements, combined with its immunity provision, will create incentives to encourage financial professionals to be able to recognize the tell-tale signs of cognitive decline, spot red flags signaling possible financial exploitation as early as possible when their intervention may be able to prevent harm or limit the damage to victims of financial exploitation.
For further information Visit DHR’s APS Page, or contact DHR’s Adult Abuse Hotline, toll-free, 1-800-458-7214 or email them at email@example.com. Information is also available at the Alabamhttp://firstname.lastname@example.org Securities Commission website, www.asc.alabama.gov, or call, toll-free, 1-800-222-1253.