Topic: Elder Financial Exploitation
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One of our elderly customers deposited a cashier’s check, which she believes was sent by someone who promised to marry her. We called the issuing bank before making the funds available from the deposit, and they confirmed that the cashier’s check was legitimate. About a month after the deposit, the customer requested a wire to send the funds, which we have not yet executed. We have frozen the customer’s account, which still contains the majority of the funds from the deposited cashier’s check, and reported the potential elder financial exploitation of our customer. Is there any chance that the deposited cashier’s check could be returned?
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First, we do not believe that the issuing bank could return the cashier’s check. The Illinois Supreme Court has held that a cashier’s check is the equivalent of cash. In Illinois, as a general rule, once the cashier’s check enters the stream of commerce, the issuer is liable under the UCC if it refuses to…
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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…
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The recent federal regulatory reform legislation (S. 2155) included a new Senior Safe Act. Is this different than the Illinois elder financial exploitation training requirements? Are there any additional requirements? What does this mean for our bank?
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We do not believe that the Senior Safe Act will bring significant changes for your bank. Because it does not preempt or limit Illinois law, we believe that its protections will be additive to the existing liability protections under Illinois law. The Senior Safe Act confers somewhat limited protections for banks and other financial companies…
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We received a letter from an approved Department on Aging provider agency requesting a customer’s financial information. Can we rely on this letter to release our customer’s financial records? The Illinois Banking Act requires the Department on Aging to present a subpoena, but the Adult Protective Services Act requires only a “written request.”
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No, we do not believe that you should rely on a letter to release your customer’s financial records to the Department on Aging’s approved provider agency. You may release your customer’s financial records only in response to a subpoena from the approved provider agency, or when your institution suspects that an elderly customer or customer…
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We are preparing for staff refresher training on elder financial exploitation early next year. Can you confirm that Illinois still does not make bank employees mandatory reporters of suspected elder abuse?
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Yes, we can confirm that banks and their employees are not mandatory reporters of suspected elder abuse in Illinois — such reporting is purely voluntary. For resources related to our guidance, please see: Adult Protective Services Act, 320 ILCS 20/2(f-5) (The definition of “mandated reporter” does not include financial institutions or their employees.) Illinois Banking Act, 205 ILCS…
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One of our customers signed an affidavit of forgery relating to four checks that were drawn on her account (we believe this is related to elder abuse by her son). We paid two of the checks and returned two NSF. We are going to refund the two checks that were paid. Can we return these checks? The midnight deadline already has passed. Does Rule 9 apply?
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No, we do not believe that you may return the checks after the midnight deadline. Generally, your bank must return a check, including a forged check, by midnight on the next banking day after receiving the check, as required by the Uniform Commercial Code (UCC) (with certain limited extensions permitted under Regulation CC). In this…
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We have an elderly customer. One of her children has sued another of her children in what appears to be a squabble over the customer’s money. Now, we have received a letter from a local nonprofit that provides services to elderly persons requesting the customer’s financial information (it asks us to provide a copy of a particular check). The letter states that it is from “Adult Protective Services,” but it does not list a government agency and is not a court order. We are not aware of any circumstances that would suggest elder financial exploitation. Are we required to respond to this request?
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No, we do not believe that your bank is required to provide your customer’s private financial information to the local nonprofit in response to its letter. Illinois law permits, but does not require, financial institutions to report suspected elder financial exploitation to the Illinois Department on Aging (DoA) or to the DoA’s “provider agencies.” The…
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We have an elderly customer who we think is being scammed. We see repeated charges on his checking account from a computer repair company (these are remotely created checks rather than physical checks). Each new charge is usually around $600. We have tried to explain to the customer that we think he is the victim of a scam, but the charges keep appearing. We know about our reporting obligations under state and federal law regarding suspected elder financial abuse, but can we also stop payment on these charges?
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Your bank may stop payments on these charges provided your customer’s account agreement grants you this authority under these circumstances. Demand deposit account (DDA) agreements typically include a provision permitting the bank to decline a transaction if the bank suspects fraud or otherwise finds it necessary to protect the customer or the bank. Such a…
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An elderly customer purchased a $9,000 cashier’s check. She came in the next day to request a stop payment, as she now believes that she was defrauded — she had received a telephone call from someone claiming to be with Publisher’s Clearinghouse, who told her that she had won and needed to send in a $9,000 cashier’s check to withdraw her winnings. Can we stop payment?
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No, we do not believe that you should stop payment on the cashier’s check. The Illinois Supreme Court has held that a cashier’s check is the equivalent of cash. As a general rule, once a cashier’s check enters the stream of commerce, the issuer (your bank) is liable under the Uniform Commercial Code (UCC) if…
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What is our bank’s responsibility when we have reason to believe that an elderly customer’s daughter may be abusing her access to her mother’s account? The daughter also may be violating her fiduciary duties as established in a Department of Veteran Affairs Fiduciary Agreement naming the elderly customer as the beneficiary of veteran benefits and the daughter as the fiduciary of the funds.
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If your bank suspects the financial exploitation of an elderly customer, state law encourages you to report the activity to the Illinois Department of Aging, and federal law may require you to file a suspicious activity report (SAR) if certain conditions are met. Under the law in Illinois, banks are permitted (but not required) to…