The Financial Crimes Enforcement Network has released an advisory to financial institutions regarding spotting and reporting on activities involving elder financial exploitation. FinCEN released the advisory because financial institutions may be uniquely positioned to observe such exploitation.
The following examples are “red flags” that may necessitate the filing of SAR reports:
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.
A SAR (Suspicious Activity Report) must be filed if a financial institution knows, suspects, or has reason to suspect that a transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction, the financial institution should then file a Suspicious Activity Report. See, e.g., 31 CFR § 103.18(a) (future 31 CFR § 1020.320(a))