IBA Compliance Connection

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We have a disabled customer who is no longer able to travel in an automobile and would like her caregiver to cash checks and withdraw funds from her account. However, the customer doesn’t want to add the caregiver as an authorized signer and is not interested in a power of attorney or opening a second account with the caregiver as a joint owner. The customer also does not want to use internet or telephone banking, even with our assistance and training. The caregiver was in a branch recently and was very ornery with our staff. Also, we’re not sure if we are comfortable with cashing checks for the caregiver, even if the customer has endorsed the checks, given that the customer will not be present when we cash the checks. Does Illinois have anything like the EU’s “third party mandate” that could resolve this situation?

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Based on the facts provided, your bank may want to consider reporting this matter as suspected elder financial exploitation. Additionally, if you have had no communication with the customer, and only the caregiver has informed the bank of the customer’s wishes, we recommend attempting to communicate with the customer directly.

Whether to cash checks presented by the caregiver and endorsed by the customer is a business decision for your bank, but here, the facts suggest there is a possibility the caregiver is acting improperly. One possible safeguard would be to call the customer and obtain the customer’s verbal authorization to proceed before cashing checks presented by the caregiver, even if the customer’s endorsement appears on the checks.

As to the “third party mandate,” this is a document used in the European Union to inform a bank that it may accept instructions about a customer’s account from a person named in the third party mandate. The most comparable instrument in Illinois would be a power of attorney, an idea which the customer apparently has rejected.

For resources related to our guidance, please see:

  • Adult Protective Services Act, 320 ILCS 20/4(a) (“Any person who suspects the abuse, neglect, financial exploitation, or self-neglect of an eligible adult may report this suspicion to an agency designated to receive such reports under this Act or to the Department.”)
  • Adult Protective Services Act, 320 ILCS 20/4(a-7) (“A person making a report under this Act in the belief that it is in the alleged victim’s best interest shall be immune from criminal or civil liability or professional disciplinary action on account of making the report, notwithstanding any requirements concerning the confidentiality of information with respect to such eligible adult which might otherwise be applicable.”)