On June 15, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a new advisory to alert financial institutions to the rising trend of elder financial exploitation (EFE). EFE involves the illegal or improper use of an older adult’s funds, property, or assets, and is often perpetrated either through theft or scams.  

EFE theft schemes involve the theft of an older adult’s assets, funds, or income. Perpetrators of elder theft are often family members and non-family caregivers who abuse their relationship of trust. Instances of elder theft often follow a similar methodology in which trusted persons may use deception, intimidation, and coercion against older adults to access, control, and misuse their finances.

In contrast, EFE scams involve the transfer of money to a stranger or imposter for a promised benefit or good that the older adult did not receive. Scams involve fraudsters, often located outside of the U.S., with no known relationship to their victims. Elder scams often follow a similar methodology in which scammers contact older adults under a fictitious persona via phone call, robocall, text message, email, mail, in-person communication, online dating apps and websites, or social media platforms. The fraudster will often request victims to make payments through wire transfers and/or convince elders to disclose personally identifiable information (PII). 

Unfortunately, perpetrators of EFE schemes often do not stop after first exploiting their victims. In both elder theft and scams, older adults are often re-victimized and subject to further financial loss. Often, most incidents go unidentified and unreported as victims often choose not to come forward out of fear, embarrassment, or lack of resources.

Recent data shows wire fraudsters are becoming more aggressive and targeting seniors at alarming rates and with increasingly higher-value wire fraud attempts. Older adults are targets for financial exploitation due to:

  • Income and accumulated life-long savings
  • Declining cognitive or physical abilities 
  • Isolation from family and friends 
  • Lack of familiarity or comfort with technology
  • Reliance on others for their physical well-being, financial management, and social interaction

The COVID-19 pandemic, surging inflation, rising interest rates, and the rise of digital banking, exacerbated these vulnerabilities for many older adults.   

FinCEN’s EFE advisory identified behavioral and financial red flags, as well as common elder scam typologies to help financial institutions with identifying, preventing, and reporting suspected EFE.  

Victims of EFE often have limited contact with others. For some, their only outside contact may involve visiting or communicating with their local financial institution. Because of this relationship with older customers, financial institutions play a critical role in protecting them from possible financial exploitation. Therefore, it is critical for staff to identify and consider these red flags when conducting transactions involving their older customers.

Please refer to FinCEN’s news release and advisory for more information along with a complete list of the new EFE typologies and red flags.

Jennifer Broskie
BSA/AML Investigator