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Who and What Protects California Seniors From Financial Abuse?


6 min read

Who and What Protects California Seniors From Financial Abuse?

Who and What Protects California Seniors From Financial Abuse?

Who and What Protects California Seniors From Financial Abuse?

Financial abuse is among the most common yet underreported crimes among elderly citizens. A 2011 study of New York City elders found that Financial abuse was self-reported at a rate of 42.1 out of 1,000 participants (4.21%), while its documented rate was 0.96 per 1,000 people (0.096%). As losses continue to be reported in the billions, there is no telling how deep the cut is due to underreporting. So, what institutional methods are being implemented to protect elders against financial abuse?

Persecution and Penalization

Laws vary state by state; however, in California, committing financial elder abuse is penalized in CA Penal Code section 368(d) and 368(e). Both sections describe caretakers or non-caretakers who violate laws, forbidding:

 “theft, embezzlement, forgery, or fraud, or who violates Section 530.5 [forbidding] identity theft, with respect to the property or personal identifying information of that elder or dependent adult”

The consequences for committing elder financial abuse are as follows:

  • “(1) By a fine not exceeding two thousand five hundred dollars ($2,500), or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, or by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or four years, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a value exceeding nine hundred fifty dollars ($950).”
  • “(2) By a fine not exceeding one thousand dollars ($1,000), by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a value not exceeding nine hundred fifty dollars ($950).”

Mandatory Reporters

Laws on who is a mandated reporter for elder financial abuse also vary from state to state. In California specifically, the positions that are typically required to report suspected instances of elder abuse include:

  • All officers and employees of financial institutions are mandated reporters of suspected financial abuse.
  • In connection with providing notary services, any notary public who has observed or has knowledge of suspected financial abuse of an elder or dependent adult is a mandatory reporter of suspected financial abuse.
  • Any person who has assumed full or intermittent responsibility for the care or custody of an elder or dependent adult, whether or not they receive compensation
  • Any elder dependent adult care custodian 
  • Health practitioners
  • A clergy member, excluding any unpaid volunteers whose principal occupation or vocation does not involve active or ordained ministry in a recognized religious organization
  • An employee of a country adult protective services agency or local law enforcement agency

Failing to Report

Many financial professionals are mandated reporters of financial abuse and are legally obligated to report to certain authorities when they suspect abuse. Again, laws and penalties will vary state by state. However, failing to report in California can lead to different consequences depending on the case context:

  • Failing to report, impeding, or inhibiting a report of financial abuse of an elder is a misdemeanor, punishable by six months imprisonment, a $1,000 fine, or both.
  • A mandated reporter who willfully fails to report financial abuse of an elder where that abuse results in death or significant bodily injury shall be punished by not more than one year in a county jail and a fine of $5,000.
  • Banks and financial institutions are mandated reporters under Welfare and Institution Code §15630.1. Failure to report can lead to a $1,000 fine. Intentional failure to report can result in a $5,000 fine. There is no imprisonment or private right of action against institutions that fail to report financial abuse. 

This means that if an individual suspects financial abuse is happening, they can only recover the damages if they have civil action brought explicitly by an attorney general, district attorney, or county counsel against the bank/institution.

Personal Protections

Power of Attorney

If worst comes to worst and you are incapacitated and unable to make financial decisions, appointing a trusted individual as your power of attorney can save unwanted stress and potential financial loss. You can also employ more than one person for this duty so they can share the workload and keep one another accountable. 

In 1991, the Administration on Aging (AoA), an agency of the U.S. Administration for Community Living, launched the Eldercare Locator, the only national information and referral resource for elderly consumers suffering from various issues. If you are in need of free or low-cost legal assistance, they can direct you to a variety of resources.

They have a National Call Center (800.677.1116) that operates Monday-Friday, 8 am - 9 pm EST, and a website: Serving over 500,000 requests annually, you can also get information regarding transportation, housing, benefits eligibility, and home/community-based services from Certified Information Specialists. 

Digital Tracking

There are multiple tools available online, in addition to banking apps, that can help you track your finances and monitor your accounts for any suspicious activity. Of course, keeping a close eye on your banking statements and checking your banking app for any unusual withdrawals is always essential. 

Companies like EverSafe and LifeLock can also help track any odd spending patterns and contact a trusted advocate to guide you through the situation. EverSafe specifically can reimburse you for lawyer fees in cases of identity theft. 

Bank Security

In addition to the consumer alerts and protection built into most banking systems and finance management apps, banks and financial institutions also have internal protocols to prevent financial exploitation. All institutions have their specific methods for how they operate and the codes that they follow. However, the Consumer Financial Protection Bureau (CFPB) released its guidelines on preventing and responding to elder financial exploitation, explaining practices most institutions should follow. 

CFPB’s Best Practices

  1. Develop, implement, and maintain internal protocols and procedures for protecting elder account holders. Methods can include:

    a. Adopting training requirements and allocating resources to protection efforts

    b. Implementing procedures for reporting to appropriate federal, state, and local entities

    c. Arranging the sharing of account information with third parties designated “trusted” by elder account holders

    d. Complying with the Electronic Fund Transfer Act (EFTA)

  2. Train management and staff to present, detect, and respond. They recommend that training programs should include, at a minimum:

    a. Adoption of a comprehensive and multifaceted definition of elder financial exploitation

    b. Categorical descriptions of indicators of potential elder financial exploitation

    c. Preventative measures and clearly defined action steps for internal responses, hierarchical reporting, law enforcement reporting, and filing detailed Suspicious Activity Reports.

    d. They do recommend that banks should also tailor training programs to encapsulate various roles in the company (i.e., tellers vs. supervisors)

  3. Harness new technologies that help flag suspicious activity. At a basic level, they recommend that these technologies be able to:

    a. Differentiate between services/products.

    b. Types of activity that may be associated with elder exploitation risk

    c. The CFPB also recommends that banks expand their Bank Secrecy Act and Anti-Money Laundering compliance programs to include elder fraud.

  4. Report all cases of suspected exploitation to relevant federal, state, and local authorities regardless of whether reporting is mandatory. 

  5. Establish greater protections for elder account holders overall. They recommend that banks encourage powers of attorney or otherwise establish procedures for customers to provide advance consent for sharing nonpublic personal account information. They also recommend that banks employ age-friendly services such as:

    a. Information on planning for incapacity or disability

    b. Honoring powers of attorney

    c. Protective opt-in account features (i.e., withdrawal limitations, alerts, transaction restrictions for specific merchant categories, etc.)

    d. Highlighting the risks and proper use of joint account access

  6. Collaborate with other stakeholders, state and local agencies, senior service organizations, and community initiatives by offering educational programs and distributing/providing informational material to older account holders about financial exploitation.

There are a lot of financial protections provided and available for elderly citizens these days, from federal agencies to local caretakers; however, it’s always important to stay informed about them as they are ever-evolving. If you or a loved one would like to learn more about ways to prevent elder abuse or the subject, check out our blog for more information and resources.

Recognize the signs of abuse.