CFPB Releases Elder Financial Exploitation Report
Inside Subprime: April 26, 2019
By Aubrey Sitler
Earlier this year, the Consumer Financial Protection Bureau (CFPB) released a new report on the financial exploitation of older Americans. The report, entitled Suspicious Activity Reports on Elder Financial Exploitation: Issues and Trends, analyzes data from Suspicious Activity Reports (SARs) filed with the the federal government by financial institutions between 2013 and 2017. These SARs cover over 180,000 suspicious activities targeting older adults by everyone from professional scammers to family members and caregivers. These reports also comprise more than $6 billion in total, demonstrating just how prevalent and widespread financial abuses of older adults in the U.S. are.
Several notable and alarming findings surface in the CFPB’s report:
- The number of SARs filed on elder financial exploitation (EFE) quadrupled from 2013 to 2017. There were a whopping 63,500 total EFE SARs filed in 2017, and based on studies that look into the prevalence of reporting, this number is probably way smaller than the actual number of instances of financial abuse that older adults experience.
- Money services businesses have started filing a lot more EFE SARs in recent years. In 2013, their reports only comprised 15% of all SARs, but by 2017, that proportion had climbed to 58%.
- In 2017, financial institutions’ SARs totaled over $1.7 billion, and they included actual financial losses and unsuccessful attempts to steal older adults’ funds.
- Almost 80% of EFE SARs involved actual loss of money, either to elders or the financial institutions filing the reports.
- For those SARs concerning financial losses to an older adult, the average amount of money lost was $34,200, and 7% of those SARs involved a loss of more than $100,000.
- For those SARs concerning financial losses to a filer (i.e., a financial institution filing the report), the average amount of money lost was $16,700.
- A third of the older adults who lost money were over 80 years old, but elders aged 70 to 79 lost the most amount of money on average—$45,300.
- People lost more money on average when they knew the person suspected of exploiting them. On average, those who knew the suspect lost about $50,000, while those who were financially exploited by a stranger lost an average of $17,000.
- The types of suspicious activities reported in EFE SARs varied widely, but more than half involved a money transfer.
- EFE SARs pertaining to checking and savings accounts had higher average monetary losses ($48,300) than those involving money transfers ($32,800 in losses on average).
- On average, EFE SARs’ reported suspicious activities took place over four months per incident.
- The majority (over two-thirds) of filers did not report EFE SAR incidents to local, state, or federal authorities.
From this report, it is clear that the prevalence of elder financial exploitation and abuse is startlingly high, and the report calls for financial institutions, law enforcement, social service providers, and policymakers to get involved to stop it.
Specifically, it notes that while it is heartening that the number of EFE SARs filed increases—denoting one way in which such abuses are at least identified—the lack of reporting to law enforcement and/or adult protective services is a major missed opportunity to pursue prosecution of perpetrators and restitution for victims. It also calls for policymakers and law enforcement to review the data to determine the ways in which they can respectively pursue proactive actions to prevent and end EFE using the levers available to them.