“It’s a tough situation for people in financial services. However, these circumstances can pull the curtain back on elder financial abuse. That’s because banks and other financial institutions can sometimes spot potential problems early.”
A man who makes loans in a company that is not quite a bank and not quite a payday lending company, remembers when a young man came in for a loan to buy a truck. According to wbhm.com’s report “Uncovering Elder Financial Abuse? It’s Tricky,” the 19-year-old did not have any credit history and had only been employed for a few weeks, so he brought his grandfather with him to co-sign the loan application.
The grandfather told him, “I don’t really want to, but they’re saying it’s the only way he can get it.” This raised a red flag for the man as a possible instance of elder financial abuse, but it presented a difficult situation. He wanted to make the loan and avoid negative reviews on social media. What should he do?
Some financial institutions are now training their employees for signs of exploitation, keeping an eye out for things that appear out of the ordinary. Examples are a customer at a branch accompanied by someone who isn’t known to the bank who does all the talking or withdraws large sums of money from a senior’s account.
If a client is in their eighties and the bank account suddenly shows a lot of nightlife spending, it’s a sign that something’s wrong.
One bank has an internal hotline that employees can call. The bank then turns over the report to authorities. There are also government agencies that protect seniors from financial abuse. Alabama’s Department of Human Resources has an Adult Protective Services Division, where one employee says about half of the cases are straightforward and the other half are challenging.
One woman was sending money overseas, thinking she was in a relationship that would end in marriage. She had all her faculties and that’s the key. Since she understood what she was doing, even if she was making poor decisions, there wasn’t much the department could do.
Just because the Department of Human Resources can’t help, that does not mean a crime had not been committed.
Alabama assistant attorney general Diane Dunning says the state has recently passed laws to better combat elder financial exploitation. One such law allows brokers to delay a payout if they suspect elder abuse.
The law also protects financial professionals from liability if they make a good faith report of possible abuse.
What about the man who was asked to make a loan with the grandfather as co-signer? He was denied the loan for other reasons.
For more information about elder law and estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Resource: wbhm.com (Aug. 7, 2018) “Uncovering Elder Financial Abuse? It’s Tricky.”