40 NOVEMBER / DECEMBER 2021 Elder Abuse Provisions of the Senior Consumer Protection Act COMPLIANCE CONNECTION Brett J. Ashton Partner Krieg DeVault LLP bashton@kdlegal.com Krieg DeVault LLP is a Diamond Associate Member of the Indiana Bankers Association. Question: An elderly customer came into the bank with his grandson several months ago. The customer withdrew over $15,000 from his account and insisted on receiving the funds in cash. The branch manager met with the customer and his grandson prior to releasing the funds. While the customer insisted on withdrawing funds in this manner, he allowed his grandson to lead the conversation. We have since received a letter from the attorney general’s office alleging that the customer had been a victim of elder abuse, and asking for us to provide information in connection with his account. Does Indiana law contain an elder abuse statute for financial transactions, and can the attorney general’s office fine us for not stopping the withdrawal? Answer: Indiana law provides protection for elderly consumers from financial fraud under the Senior Consumer Protection Act.1 The SCPA contains a cause of action against a person committing financial exploitation of a senior consumer for both the senior consumer victim, and the attorney general, when the person knowingly and by deception or intimidation obtains control over the property of a senior consumer or illegally uses the assets or resources of a senior consumer.2 A person is considered a “senior consumer” if they are at least 60 years of age. The SCPA further provides that the “illegal use” of assets or resources of a senior consumer includes the misappropriation of those assets or resources by undue influence; breach of a fiduciary relationship; fraud, deception, extortion or intimidation; or the use of the assets or resources contrary to law.3 The SCPA, however, provides a clear waiver from liability for any person who has made a good faith effort to assist a senior consumer in the management of their property, but through no fault of their own has been unable to do so. In the scenario described above, while the elder1 Ind. Code § 24-4.6-6 2 Ind. Code § 24-4.6-6-4(b) 3 Ind. Code § 24-4.6-6-4(b) 4 Available at: files.consumerfinance.gov/f/201603_cfpb_advisory-for-financial-institutions-on-preventing-and-responding-to-elder-financial-exploitation.pdf 5 Available at: consumerfinance.gov/f/documents/cfpb_suspected-elder-financial-exploitation-financial-institutions_report.pdf ly customer may have been the victim of financial exploitation by his grandson, the bank did not engage in deception or intimidation to obtain property from the customer. Moreover, even if the senior consumer or the attorney general’s office were to assert that the bank engaged in deceptive behavior, the efforts by the branch manager would likely constitute a good faith effort to assist the customer. While the bank may not have liability under the SCPA in this case, the risk of civil litigation from protective family members of the senior consumer alleging the bank was grossly negligent in allowing the transaction to occur, while groundless, is always possible regardless of the actions of your branch employees. As a general rule, any transaction with a senior consumer that involves others should be reviewed carefully. Two helpful guides worth reviewing when establishing your bank’s procedures for dealing with potential elder abuse are: • “Advisory for Financial Institutions on Preventing and Responding to Elder Financial Exploitation,” March 2016.4 • “Reporting of Suspected Elder Financial Exploitation by Financial Institutions,” a July 2019 update to the “Advisory” guide.5 Both of these guides were published by the Consumer Financial Protection Bureau, and both have value for bankers. HB This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation.
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