Financial Institution Reporting of Suspected Elder Abuse

November 15, 2013 at 4:38 pm Leave a comment

Written by: Nate Van Emon

Recent guidance emphasizing the importance of reporting suspected financial abuse of older adults is beneficial for both financial institutions and America’s growing population of older adults.  The new guidance encourages financial institutions to report suspected elder abuse by clarifying that certain disclosures fall within the exemptions to the general rule prohibiting the disclosure of a consumer’s nonpublic personal information under the Gramm-Leach-Bliley Act (the “GLBA”) and its implementing regulations.

As background, the GLBA provides that “a financial institution may not, directly or through any affiliate, disclose to a nonaffiliated third party any nonpublic personal information,” unless the financial institution notifies the customer that such information may be disclosed to third parties and provides the consumer with the opportunity to direct that the information not be disclosed.  See 15 U.S.C. § 6802(a)-(b).  However, the GLBA does permit the disclosure of a consumer’s nonpublic personal information without complying with the notice requirements to prevent fraud and to protect against unauthorized transactions, among other circumstances. § 6802(e)(1)-(8).

According to studies cited in the guidance, “financial exploitation is the most common form of elder abuse and that only a small fraction of incidents are reported.”  Because employees at financial institutions are in a unique position to notice changes in the banking patterns of an older adult or suspicious interactions with the older adult and his or her caregiver, the regulatory agencies hope that the guidance will result in increased awareness, reporting and ultimately the prevention of the financial exploitation of older adults.

A copy of the guidance is available here.

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