Reporting the possibility that someone could be a victim of fraud doesn't violate laws guaranteeing financial privacy, seven federal regulators jointly announced Tuesday.
In fact, banks, credit unions and other front-line financial institutions that deal frequently with older people have a responsibility to report suspected financial abuse, regulators said.
"Bank employees can spot financial abuse before others. We want to clarify: Reporting elder abuse is the right thing to do and doesn't violate privacy laws," said Richard Cordray, director of the Consumer Financial Protection Bureau, at a press conference Tuesday.
A recent report from the Government Accountability Office found that in 2010, older Americans lost more than $2.9 billion to financial fraud, but apparently, financial institutions have sometimes ignored signs that people living in retirement might be victims of financial crimes because the banks feared that reporting their suspicions would violate the Gramm-Leach-Bliley Act. This law requires banks to notify consumers before the banks share third-party information and offer consumers a chance to opt out.
"Today's guidance makes it clear that reporting suspected elder abuse doesn't violate the Gramm-Leach-Bliley Act," Cordray emphasized.
Nora Eisenhower, assistant director of the Office of Older Americans, listed six commonsense steps that anyone should take to protect themselves from some of the most common scams that can ruin retirement planning:
- Never respond to requests for money from people you don't know.
- Never send money in hopes of collecting a prize.
- If someone you don't know sends you a check, don't wire money back. And it is probably unwise to even cash the check because it may bounce.
- Don't share your financial information with people you don't know.
- Be suspicious of work-at-home schemes, prize promotions, anyone selling precious metals and the most recent fertile ground for fraud -- opportunistic offers related to the Affordable Care Act.
- Check your credit report at least annually. If you see an account that isn't yours, report it.
Eisenhower also warned against signing anything that would allow someone else to profit from your reverse mortgage.
It's rough out there. Keep your eyes open and your hand on your credit cards.