The New California Mandate: Reporting Suspected Elder Financial Abuse

Elder financial abuse is the fastest growing crime of the 21st century. With numbers increasing each year, new methods have been implemented in order to protect these individuals.


In Brentwood, Calif., an elderly widow targeted in a ‘sweetheart scam’ lost nearly $200,000 over a nine-month span. First, her new ‘boyfriend’, who said he was expecting a large inheritance but ‘the money was tied up’, asked her for small loans, but gradually, the loans got bigger. She cashed stocks and ultimately took out a mortgage on her house, believing the money would be paid back. It wasn’t, but, thankfully, the perpetrator was caught and sentenced to three years in prison.

Elder Financial Abuse: The Crime of the 21 st Century

Elder financial abuse is generally defined as the improper use of a senior’s funds‚ property or assets. Examples include misuse of powers of attorney, convincing or intimidating an elder to withdraw large sums of money for personal gain, scams and telemarketing fraud. Signs of financial exploitation may include sudden large withdrawals of cash, or transferring the title on a bank account to a new acquaintance.

Financial abuse of elders continues to increase at an alarming rate throughout the nation. Experts say that elder financial abuse is “the crime of the 21st century” as the burgeoning senior population becomes a target. Tragically, an estimated 150,000 to 200,000 seniors are financially abused in California each year and the National Center on Elder Abuse estimates there may be 5 million victims a year nationally. Victims rarely recover financially and losses often lead to depression, increased physical problems, reliance on public benefits and even death. In fact, the American Medical Association has reported that elders who have been financially abused are 3 times more likely to die as a result.

Sadly, elder financial abuse is a silent crime and public awareness of the problem is currently marginal. Education and raising awareness is key—for elders, the general public and the financial services community. And financial institutions can play a critical role in preventing the exploitation of elders because their employees are in a unique position to have early, and often, the only knowledge of elder financial abuse ‘in action’.

Mandated Reporting of Suspected Elder Financial Abuse

In August, 2005, California Governor Arnold Schwarzenegger signed legislation, (SB 1018, “The Financial Abuse Reporting Act”) requiring all California financial institutions to report suspected elder financial abuse, effective January 1, 2007.

SB 1018 states that “suspected financial abuse” occurs when a bank employee observes behavior or transactions that would give him/her reasonable belief that an elder is the victim of financial abuse.

Bank employees must report suspected financial abuse by telephone immediately, or as soon as possible, and file a written report within two working days with the local adult protective services or law enforcement agency. Banks are subject to a fine of up to $5,000 for failure to report an incident.

Preparing for SB 1018: Tools for Financial Institutions

Jenefer Duane, CEO and executive director of Elder Financial Protection Network, a California-based non-profit organization, recommends that financial institutions take three steps to prepare for SB1018: 1.) Train their staffs to recognize and report suspected abuse 2.) Implement a policy that addresses this issue and 3.) Develop relationships with local reporting resources. Duane is encouraged with the progress she sees in communities throughout California. She says, “Fortunately, increasing numbers of cases are being reported earlier—before a devastating loss occurs—as a result of the actions of our dedicated partners to train their staffs and to support community education about this issue. Together, we can make a difference in stopping this dreadful crime in its tracks.”

Elder Financial Protection Network (EFPN) offers training products and services to help financial institutions comply with SB1018. Its’ award-winning ‘Be Wise: Recognize and Report Elder Financial Abuse’ staff training program is currently available in VHS and DVD format via Western Payments Alliance ( Through the support of California Credit Union League and Harland Educational Services (, this educational and compliance content will be available in an on-line learning format in early July. Additionally, EFPN offers customized ‘train-the-trainers’ workshops and awareness tools such as brochures and statement stuffers for financial institution customers/members. For more information about Elder Financial Protection Network, visit:

Harland Educational Services, part of John H. Harland Company (NYSE: JH) delivers solutions for staff and member education and research. For more information, call us at (800) 291-6117 or visit



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June 12, 2006


  • this is a test
    iffat mahmud
  • Couldn't you guys at least change "bank employees" to "credit union employees". Bank is not a generic term.
    Bert Fallon