Feds decree protecting seniors from fraud trumps privacy concerns

Feds decree protecting seniors from fraud trumps privacy concerns
SEATTLE -- Financial scams targeting the elderly are a serious problem, netting thieves billions of dollars a year. And things are sure to get worse as the U.S. population ages.

The feds want those on the front-lines -- employees at banks, credit unions and other financial institutions -- to help fight this fraud.

Let's say a bank teller suspects an elderly customer is about to be swindled out of a lot of money -- maybe they say they need $1,000 to claim a prize. Maybe there's a stranger with them who seems focused on getting them to withdraw money or put them on their account as a co-signer.

What should the teller do? Say something to the customer? Tell the police? If they do, are they violating privacy laws?

In a written document to financial institutions across the country, the eight agencies that regulate them said, in no uncertain terms, that the need to protect seniors trumps privacy concerns.

"Privacy protections are important to everyone, but those privacy protections provide clear exceptions in the case of addressing fraud or other illegal misconduct," said Martin Gruenberg, Chairman of the FDIC.

The new guidance, issued Tuesday, also makes it clear that financial institutions can disclose nonpublic personal information to law enforcement agencies investigating suspected financial abuse of older adults.

Richard Cordray, Director of the Consumer Financial Protection Bureau said, "reporting suspected elder financial abuse to the appropriate authorities is typically the right thing to do and generally will not violate the Gramm-Leach-Bliley Act."

Gramm-Leach-Bliley, also known as the Financial Services Modernization Act of 1999, is the law that spells out what financial institutions can do with your personal information.

No one knows for sure how much elderly Americans lose to financial fraud. One recent study put the losses at nearly $3 billion a year. The problem won’t go away, but maybe this will help reduce the crime a bit.

More Info: Financial abuse of elderly not trumped by privacy laws: feds