Responses to the Problem of Financial Crimes Against the Elderly

Your analysis of your local problem should give you a better understanding of the factors contributing to it. Once you have analyzed your local problem and established a baseline for measuring effectiveness, you should consider possible responses to address the problem.

The following response strategies provide a foundation of ideas for addressing your particular problem. These strategies are drawn from a variety of research studies and police reports. Several of these strategies may apply to your community's problem. It is critical that you tailor responses to local circumstances, and that you can justify each response based on reliable analysis. In most cases, an effective strategy will involve implementing several different responses. Law enforcement responses alone are seldom effective in reducing or solving the problem. Do not limit yourself to considering what police can do: give careful consideration to who else in your community shares responsibility for the problem and can help police better respond to it.

General Responses

The responses that follow are useful for addressing the problems of both fraud and financial exploitation. Strategies targeting the specific elements of each type of financial crime are discussed separately below.

1. Creating multiagency task forces. Elder fraud and financial exploitation cases are complex and require expertise in multiple areas, including

   • law enforcement and investigation,
   • financial management,
   • insurance,
   • investments,
   • real estate,
   • probate law,
   • criminal law,
   • civil law,
   • mental capacity, and
   • social services for the elderly.

   It is unlikely that a single agency will have the necessary skills and resources for a multidisciplinary approach. Thus, multiagency efforts are required, should include agencies and individuals with knowledge in the key areas, and should be tailored to the characteristics of the local problem. †

   † In Canada , the Deceptive Telemarketing Prevention Forum included representatives from government, private, and nonprofit organizations to gather and share intelligence, formulate response strategies, and develop public education efforts. Participants included credit card companies, telephone companies, retired persons associations, marketing associations, police, bankers, the postal service, consumer groups, and the Better Business Bureau. For more information, see the Royal Canadian Mounted Police web site, www.phonebusters.com .

   In the United States , many state and local jurisdictions have developed area TRIADs, which are partnerships between local and state police agencies, sheriffs associations, and retired persons associations, such as the AARP. Some jurisdictions also include agencies on aging, senior centers, health departments, and adult protective services.

   A number of jurisdictions (e.g., Los Angeles ; Orange County , Calif. ; Ventura , Calif. ) have also developed multiagency teams of specialists to investigate and intervene in elder fraud and financial exploitation cases. For example, Fiduciary Abuse Specialist Teams (FASTs) often include police, the district attorney, the city attorney, private conservatorship agencies, health and mental health providers, probate judges, trust attorneys, insurance agents, real estate agents, escrow officers, stockbrokers, and estate planners. The National Committee for the Prevention of Elder Abuse has created specific guidelines for establishing and coordinating a local FAST, which can be accessed at www.preventelderabuse.org/communities/fast.html . For more information, see also Allen (2000)Abstract only]; Aziz (2000)Abstract only]; and Velasco (2000). Abstract only]

2. Working across jurisdictions. Because both the victims and the offenders may live in and operate out of several jurisdictions, information-sharing among various law enforcement agencies is critical to building a solid case. A variety of federal, state, and local law enforcement agencies may need to be involved. Further, because financial exploitation often occurs in concert with other crimes, such as assault, neglect, and false imprisonment, multiple units within a given police agency may need to be involved.
3. Improving reporting mechanisms. It is widely agreed that underreporting dramatically skews available data on the prevalence of financial crimes against the elderly. The reasons for underreporting were discussed previously, but you should pay attention to the specific barriers to reporting in your jurisdiction. Accurate descriptions of the local problem depend on better information about the type, frequency, and characteristics of various frauds.

   Creating easy-to-access reporting mechanisms for victims, concerned family and friends, and professionals will help not only with identifying problems, but also with developing effective responses. Perhaps most importantly, improved reporting mechanisms will help in prosecuting offenders and providing needed victim services. Education campaigns should provide telephone numbers for reporting incidents of victimization. It is also useful to include a short description of what the elder can expect to be asked, what the typical response time is, and what the procedures are.

   Once a multiagency effort is established, it is important to create clear and efficient pathways for cross-agency reporting for police, adult protective services, and other agencies. Because each agency serves a different need, it is critical that each agency be deployed to offer relevant services to victims. Cross-agency reporting procedures should ensure that each agency mobilizes its resources without impeding other agencies' work.

4. Training police to interview elderly victims of financial crimes. Once the problem of underreporting has been tackled, intervention with offenders depends on the quality of information investigators can get from victims. There are two key areas in which focused training efforts are required: interviewing elderly victims, and investigating financial crimes.

   First, although certainly not the case for all seniors, many elderly victims have physical, sensory, memory, or other cognitive impairments that can interfere with an officer's attempt to gather information. It is therefore critical that officers are trained to identify such impairments and to respond with effective interviewing techniques. † Improving officers' skills with elderly victims has been shown to improve the quality of investigations and to positively affect victims' subsequent attitudes, behaviors, and perceptions toward the police. 38

   † The Office for Victims of Crime published a handbook for law enforcement officers that includes specific techniques for interviewing elderly victims and witnesses. It is available at [Full text]; see also National White Collar Crime Center (1998); Shibley (1995) Full text]; Kohl, Brensilber, and Holmes (1995); and Forst (2000).

   Second, given the complexity of fraud and financial exploitation cases, investigators need to cover all of the relevant domains of inquiry. These should include victim characteristics (e.g., relationship to the offender, mental capacity, etc.), offense characteristics (e.g., telemarketing scam versus financial exploitation by a caregiver), and offender characteristics (e.g., relationship, frequency of contact), as well as detailed information about the elder's estate, financial arrangements, and relevant legal documents. Several investigation checklists are available to guide the development of a comprehensive inquiry. 39

5. Decreasing victims' isolation . Seniors who are isolated and have little contact with family, friends, caseworkers, and other concerned parties may be at increased risk of being victimized by fraudulent businesses. Decreasing this isolation through police welfare checks, neighborhood watches, and in-person outreach efforts can help to ensure that elders are aware of available resources they can turn to with questions and concerns about potential scammers.40 Further, ongoing contact with family members can provide the means for ongoing monitoring of the elder's financial matters. The U.S. Postal Service has created a list of warning signs and various preventative measures for family and friends of seniors.†

   † The list is available at www.usps.com/postalinspectors/fraud/seniorwk.htm.

   Live-in caregivers who exploit seniors often isolate them to avoid being detected. Periodic contact by family, friends, and other concerned parties improves the likelihood of early detection.

   Adopt-a-Senior programs-in which volunteers regularly check on the well-being of seniors in their neighborhoods and inquire about unusual mail, phone calls, and financial transactions-have been effective in combating the isolation that places the elderly at risk, and in identifying potentially abusive situations. 41

   The strategies above apply broadly to both fraud and financial exploitation of the elderly. However, given that these two types of crime are different in several important ways, there are several responses that are more relevant to one type of crime than to the other.

Specific Responses: Fraud

6. Educating seniors and other concerned parties. Although not effective as a stand-alone strategy, when used as part of a multifaceted response, outreach efforts should educate seniors about
   • types of scams operating in the area;
   • how to screen calls using caller-identification devices and answering machines;
   • suspicious behaviors and warning signs of fraudulent offers; 42
   • how to reduce unwanted solicitations by removing home addresses, phone numbers, and email addresses from marketing and junk mail lists; †

     † The Direct Marketing Association provides clear procedures for removing personal information from national and state marketing lists, available at www.dmaconsumers.org/consumerassistance.html#mail and www.the-dma.org/government/donotcalllists.shtml .

   • how to investigate offers and potential purchases; †

     † The AARP provides a concise list of "Do's and Don'ts," a review of relevant statutes, and tactics for preventing fraud, available at www.aarp.org/fraud/home.htm.

   • how to select qualified and reputable contractors;
   • how to end unwanted sales calls; 43 and
   • how to report fraud.

   Warning Signs of Fraudulent Offers

   • A promise that you can win, make, or borrow money easily.
   • A demand that you act immediately or else miss out on a great opportunity.
   • A refusal to send you written information before you agree to buy or donate.
   • An attempt to scare you into buying something.
   • An insistence that you wire money or have a courier pick up your payment.
   • A refusal to stop calling after you have asked not to be called again.

   Source: National Fraud Information Center (n.d.).

   Some jurisdictions have found it useful to present these topics in concert with financial planning workshops. In addition, television stations can be useful partners in this endeavor. Many local stations assign reporters to consumer fraud issues and regularly air segments on the problem. Reports about local scams and general prevention measures have the potential to reach a large audience.

   The Pitch and the Law: Typical Offers by Telemarketers, and How They Violate the Law
   The Pitch	The Details	The Law
   "You are eligible to win a valuable prize!"	"You can win a car worth $35,000; $10,000 in cash; a European vacation; or a diamond necklace worth $2,000. Your purchase today of our fabulous vitamins will automatically enter you into this amazing sweepstakes."	A prize is free . You need not pay any money or buy anything to enter a sweepstakes or win a prize. The caller must tell you the "no-payment, no-purchase" method of entering. If the caller says you have already won a prize, the caller must also tell you all the costs associated with claiming it. This is important because the costs may be high and may substantially reduce the prize's value.
   "We can get your money back!"	"I was sorry to hear that you lost money in a telemarketing scam. It's really a shame that people will call you offering you a great deal and then steal your money. But my company will get your money back for you. All you have to do is give me your credit card number to cover our low service charge."	You do not have to pay in advance . These so-called "recovery rooms" are just a way to take advantage of you a second time. A caller who promises to recover or help you get back money you lost, or to obtain an item of value you were promised in a prior telemarketing call, cannot ask for or receive money from you until seven business days after you actually receive the promised money or item.
   "Great loans at great rates. Bad credit, no problem!"	"Today is your lucky day. I'm going to help you qualify for the loan you never thought you'd get. For only a small fee, I will get those late payments removed from your credit records. I'll send a courier to pick up your payment, because the sooner you pay the fee, the sooner I can get started."	You need not pay until you see proof that your credit record has been fixed. A caller is prohibited from asking for payment to remove negative information, or otherwise improve your credit report, until after 1) the period for providing you with all promised goods and services has expired; and 2) you receive documentation that the promised results have been achieved, in the form of a report from a credit reporting agency issued more than six months after the promised results were achieved. Remember that you can, on your own and at no cost, get inaccurate negative information removed from your credit report.
   "Magazines at fantastic low prices. Give me your bank account number, and they're in the mail!"	"We've extended this amazing offer one more day, and we have to receive your money by midnight tonight. But don't worry-you can meet the deadline. Just give me your bank account number, and I can process your order right away."	Callers must get specific authorization from you to take money from your bank account. The caller must get your written authorization or tape record your verbal authorization to withdraw a specified amount from your account, or send you a written confirmation of the transaction before attempting to withdraw money from your account. The caller must provide the written or taped authorization to the bank upon request.
   Source: American Association of Retired Persons (n.d.), "Telemarketing Fraud."

7. Identifying high-risk seniors. Research has shown that offenders often repeatedly target past fraud victims using "mooch lists" and recovery room scams. Identifying seniors by risk level helps to target intervention efforts appropriately.44 High-risk seniors are those whom police, prosecutors, postal inspectors, or other agency personnel have identified as previous victims. Volunteers are dispatched to help the seniors prevent future victimization. They offer ongoing, in-person contact, providing not only emotional and moral support, but also tangible tools for combating fraud, such as reviewing daily activities, sorting through the mail, and evaluating telemarketing offers.
8. Reversing the "boiler room." These large-scale operations mail out postcards offering a free and guaranteed prize to the recipients. Those who respond to the telephone number listed receive detailed information on sweepstakes fraud and how to protect themselves. Working with senior volunteers, the U.S. Postal Service, consumer protection groups, and others, police may staff the hotlines and provide the information. Similarly, "reverse telethons" use operators with expertise in various types of fraud to answer callers' questions. Task forces established to combat the local elder fraud problem publicize, schedule, and recruit experts to offer advice to seniors, their families, and other concerned parties. †

   † For more information, see Aziz et al. (2000)Abstract only]; Chatelin (1994); and U.S. Department of Justice, Office of Justice Programs (2000). [Full text]

Escape Mechanisms for Unwanted Sales Calls Refuse to communicate Leave the scene Do not respond to mail solicitation Hang up the phone Refuse the offer for the moment Indicate you will think about it and seek a second opinion Request written information about the offer Deny having the financial means to accept the offer Indicate you will verify the legitimacy of the business before accepting Refuse the offer categorically Indicate knowledge that the offer is a scam Refuse to supply personal information Refuse to pay fees, deny any charges Threaten to contact the authorities Simply refuse Take steps to avoid losing money after a suspicious offer/contact Stop payment, cancel the order Contact the authorities to have the money returned Contact the authorities to alert them about illegal activities

Source: Adapted from Friedman (1998).

9. Making it easier for people to hang up on telephone scams. Studies have shown that many people have difficulty hanging up on telemarketers, even after they have decided they are not interested in the product or service being sold. An "Easy Hang Up" device has been used to help seniors end calls without fearing they are being rude or abrupt. Once the senior decides the call is unwanted, he or she presses an activation button, and a short recorded message is played, such as "I'm sorry, this number does not accept this type of call. Please regard this as your notification to remove this number from your list. Thank you." The call is then disconnected. †

   † For more information, see Kaye and Darling (2000). Abstract only]

10. Launching undercover operations . Although time-consuming and expensive, there have been several large-scale undercover operations to dismantle fraudulent telemarketing organizations. † A key telemarketer vulnerability is the inability to be certain of whom they have called. In these operations, police officers and volunteers had their names added to "mooch lists" and posed as potential victims of telemarketing scams. Fraudulent organizations contacted them repeatedly, and the conversations were recorded and used as evidence. Such operations are usually conducted as collaborative efforts between federal, state, and local law enforcement, the AARP, and other senior advocacy organizations. ††

    † The FBI's Operation Disconnect, Operation Senior Sentinel, and Operation Double Barrel have resulted in thousands of indictments and the recovery of thousands of dollars. See also U.S. Department of Justice, Office of Justice Programs (2000). [Full text]

    †† For more information, see Slotter (1998). [Full text]

Specific Responses: Financial Exploitation

As discussed previously, the characteristics, warning signs, and perpetrators of financial exploitation differ significantly from those of fraud. While some of the methods may be similar, preventing financial exploitation by relatives and caregivers requires specific responses.

11. Enacting proactive health care, legal, and financial planning. The best defense is a good offense. Programs to help people make health care and financial arrangements before they are necessary ensure that these decisions are made thoughtfully and with the person's voluntary and informed consent. Financial arrangements can vary from direct deposit of pension and social security checks and automatic payment of utility bills, to estate planning and the creation of powers of attorney. Professional help with such planning can be offered as part of community outreach activities implemented by a multidisciplinary team.
12. Assessing statutes related to power of attorney. Although power of attorney is a common tool that serves an important and legitimate purpose for many seniors, it is also vulnerable to abuse. Specific regulations governing powers of attorney vary by state. Reviewing existing legislation and assessing current provisions for establishing, auditing, modifying, and canceling power of attorney are an important part of assessing the local problem. If existing statutes are vulnerable to abuse, consider lobbying for the addition of protective safeguards.
13. Screening caregivers. Many states do not require in-home caregivers to undergo criminal background checks. By implementing such measures, people with a history of physical or financial abuse or neglect could be prevented from working as licensed caregivers. However, this strategy would affect only those caregivers hired through licensed agencies, and would not apply to informal caregiving arrangements.
14. Training police and professionals involved in elders' affairs. Police should be trained in the specific elements of fraud and financial exploitation. Further, reports from victims and other concerned parties are likely to be complex and may be confusing to both dispatchers and responding officers. Training for these individuals should focus on proper procedures for referring cases for investigation, and on ensuring that complainants understand how the case will be handled.

    Because of their ongoing involvement in elders' financial affairs, banks and other financial institutions are uniquely positioned to help prevent and detect financial exploitation, and are therefore an essential partner in combating the problem. Several states have developed and implemented training curricula for bank tellers to recognize the warning signs of abuse, and these curricula are widely available for replication or adaptation. 45

    Similarly, attorneys and certified public accountants who prepare wills, tax returns, estate planning documents, and other legal documents are uniquely suited to serve as an early warning system to prevent financial exploitation. Particularly if trained to identify the warning signs of undue influence and diminished mental capacity, attorneys and accountants can work with a multidisciplinary team to make sure that all legal documents are executed with the elder's voluntary and informed consent, and will serve the elder's best interest. 46

    Focused training can encourage doctors to ask specific questions when assessing elders' physical and emotional well-being. During private consultations, doctors can explore the quality of elders' interactions with caregivers, increasing the likelihood of detecting financial exploitation. 47

Responses With Limited Effectiveness

15. Disseminating information as a stand-alone strategy. Traditional approaches focused on raising public awareness have had limited success when used alone. Particularly when targeting elders with significant mental impairment, those who are isolated, and those who are in desperate financial situations, public information campaigns alone are insufficient for preventing financial abuse. Further, information campaigns that rely solely on the distribution of information (e.g., fliers, pamphlets) and do not feature any in-person interaction are among the least effective strategies for preventing crime.
16. Enacting mandatory reporting laws. Although they have shown some success in preventing and responding to child abuse, mandatory reporting laws have not been shown effective in preventing, identifying, or addressing financial abuse of the elderly. Training curricula generally include only the reporting requirements, and do not help officers to detect abuse or provide responsive services; in addition, sufficient resources are not allocated for quality investigations of all reports made. 48
17. Bonding or registering telemarketers. Although bonding and registration are often suggested to prevent fraud, there is no empirical research validating the effectiveness of such provisions. While legitimate businesses are likely to comply with such requirements, fraudulent organizations are not likely to be deterred by them. Further, it is unlikely that the average consumer would know to ask about bonding or registration, or that a fraudulent salesperson would tell the truth if asked about the company's compliance. In one jurisdiction, researchers discovered that fraudulent organizations found the registration requirement helpful, as being able to tell victims they were registered with the state brought a false air of legitimacy. 49
18. Expanding existing statutes. In the literature, there are many references to the need to expand the scope of existing statutes to promote the prosecution of financial crimes against the elderly, and to enhance applicable penalties. While enhanced sentences may offer some benefit in terms of specific deterrence, there is no empirical research indicating that such statutes result in increased prosecution rates. Further, such statutes have not been shown to have a general deterrent effect.50 However, there is some evidence that requiring restitution for elderly fraud victims, and improving efforts to enforce restitution orders, can ease the harm suffered by the victim. 51