FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. For Employees of Financial Institutions, Broker-Dealers and Investment Advisers. Introduction.
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FINANCIAL EXPLOITATION OF VULNERABLE ADULTS
For Employees of Financial Institutions,
Broker-Dealers and Investment Advisers
In 2010, 17,586 reports of neglect or abuse of vulnerable adults were received by the state of Washington’s Department of Social and Health Services, Adult Protective Services (“APS”). Of those complaints, 26% were about financial exploitation of vulnerable adults. The complaints that APS receives about financial exploitation have increased in every year except for one since 2001, for an overall increase of 74%.
This means that in 2010, at least 4,566 vulnerable citizens of Washington may have had their income or wealth stolen or improperly taken from them. And, because experts believe that the actual number of these incidents is much greater than that which is actually reported, many more seniors and disabled persons have likely been financially exploited each year. And the problem is only growing.
Vulnerable adults typically have fixed incomes. They may have accumulated a nest egg, but may have little or no ability to re-build that nest egg if it is taken from them. They may be physically frail or disabled and may have a memory problem or a cognitive disability, making it impossible for them to pay for their food, housing, health care, and other living expenses if their income or assets are taken from them.
If a vulnerable adult’s income and assets are improperly taken, he or she may need to be supported by the government. This means that the choices that the vulnerable adult may have about where he or she will live, or what services he or she may have, may be limited. It also means that taxpayers will be required to fund his or her care and support.
But most critically, many vulnerable adults who are financially exploited suffer as a result. They may have to leave their home or drastically alter the plans that they had made for their retirement years. They may feel betrayed, sad and embarrassed. Their quality of life and even their physical and mental health may suffer, both in the short-term and in the long-term.
Because of concern about the growing problem of financial exploitation of vulnerable adults, the Legislature adopted a law in 2010, that expands the ability of financial institutions, broker-dealers, and investment advisers to help combat financial exploitation of vulnerable adults.
As an employee of one of these institutions, the law requires you to take this training.
This training will cover:
(1) Background information – definitions applicable
to this training;
(2) Indicators of financial exploitation of vulnerable
(3)How to report suspected financial exploitation;
(4)Tools available to your institution to help combat
We need to address the following questions:
Who Are Vulnerable Adults?
VA’s include persons age 60 and older, who need assistance in one or more aspects of their life (whether or not they actually receive the assistance)
VA’s also include the following persons age 18 or older:
What Factors Make VA’s Vulnerable?
How Does the Law Define “Financial Exploitation?”
But it is important to recognize that not all transactions that fail to benefit a VA are financial exploitation. Unless the VA has a legal guardian, the law presumes that the VA is capable of making his or her own financial decisions, even if a decision appears to be unwise. For example, a VA can give all of her money to her adult son, who just lost his job, even if that leaves her without the ability to pay her bills.
Perpetrators of Financial Exploitation
Sadly, perpetrators come from all walks of life. They may be family members, caregivers, professionals, contractors, salespersons, or people who don’t know the VA. Based on statistics, common perpetrators include the following people:
Perpetrators may also include lawyers, guardians, accountants or other advisers, or clergy or a fellow member of a church or synagogue.
The VA may undertake an unusual, significant or risky financial transaction that does not seem to fairly benefit the VA, on the advice of these types of perpetrators.
Indicators of Financial Exploitation
Reporting Suspected Financial Exploitation
Reporting suspected financial exploitation is a very serous matter. You must be familiar with your employer’s policies and procedures on reporting. Those policies and procedures will instruct you on who you report suspected financial exploitation to within your institution, and who at your institution will make the decision to report to APS and/or law enforcement.
Responsibilities of APS
APS may refer cases to others, who may take further action to protect VAs:
Legal Remedies that Financial Institutions, Broker-Dealers, or Investment Advisors Can Pursue
Your employer is authorized by law to share specific information and records with APS, law enforcement and the prosecuting attorney when financial exploitation is suspected or is being investigated.
Financial exploitation of VA’s is a growing problem which can substantially harm a VA. Financial exploitation may cause a VA victim to suffer, physically and mentally. It has a very real and negative impact on VA victims and society.
Given this concern, the Legislature has given you and your employer greater authority to help combat financial exploitation.
VA’s may be vulnerable because of physical and mental changes or conditions. They may be dependent on others or suffering from depression or the loss of a loved one.
Family members, caregivers, professionals or strangers may try to take advantage of these vulnerabilities. They may try to justify their actions by saying that they can take more of the income or assets of a VA than they are entitled to because they are helping the VA, but that is not true.
You and your employer can report financial exploitation to APS and law enforcement and share information with them.
Your employer also can impose a short-term transaction freeze in cases when financial exploitation is suspected.
It is important for you to be familiar with and understand your employer’s policies and procedures on reporting financial exploitation and short-term transaction freezes;
It is critical for you to understand who you report to when you believe financial exploitation should be reported, or when you believe a short-term transaction freeze should be considered.
Together, we can make a difference for our vulnerable adult citizens!
Thank you for your time and attention to this important topic.
This presentation is being offered in cooperation with the Washington Bankers Association and Attorney’s General Office.
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