Protecting Elder Financial Abuse Victims Using Temporary Account Holds

Background and Purpose: Elder financial fraud is a growing social issue that threatens the financial security of millions of retirees. Persistent and chronic fraud victims who do not recognize the harmful consequences of responding to scams present a serious challenge to adult protective services (APS) workers attempting to protect them from continued losses. The goal of this project is to understand the effects of a new adult protection law in Minnesota called Chapter 45A. This law authorizes temporary account holds of suspicious transactions and withdrawal requests if an older or vulnerable adult is suspected to be a victim of financial exploitation. Most states have recently passed similar laws, but none have systematically collected data on when temporary holds are applied and for whom, what investigation takes place, and how interventions impact vulnerable and older adults’ financial safety.

Methods: The Minnesota Department of Commerce is the agency responsible for implementing Chapter 45A temporary account holds after receiving and investigating reports of elder financial exploitation. Reports are submitted electronically by financial institutions, law enforcement agencies, APS, as well as friends and family members of alleged victims. We received the de-identified Chapter 45A case referral and case disposition database that included alleged victim characteristics and temporary hold decisions. We used descriptive and bivariate statistics to assess case characteristics and financial outcomes.

Results: In 2022, the Minnesota Department of Commerce received 700 phone calls from case reporters and 286 financial exploitation cases were opened for investigation (mean= 23 cases per month). More than two-thirds of reports involved fraud perpetrated by strangers (scammers). Only one third of reports involved financial abuse perpetrated by friends or family members of the alleged victims. Temporary account holds were implemented in 25% of the opened cases, resulting in the protection of $2.9 million dollars in FY2022. An average of one case per month was cross-reported to a law enforcement agency, such as the FBI, for further investigation. Reasons for not implementing a temporary hold include: (1) the allegations of financial fraud could not be substantiated, (2) the alleged victim did not meet age or vulnerability criteria for a temporary hold (i.e., not age 65+ or a vulnerable adult ages 18 to 64), or (3) the alleged victim’s behavior of responding to scams was effectively stopped using other intervention methods. We determined that there is substantial under-reporting of cases involving Black, Hispanic, American Indian, and Asian/Asian Pacific Islander older and vulnerable adults relative to the size of these populations in Minnesota.

Conclusions and Implications: Temporary holds have the potential to protect chronic victims against significant financial losses. Future research should investigate the psychological impact of receiving a temporary hold from the alleged victim’s perspective. More research is needed to determine why minority older and vulnerable adults are not receiving equal access to Chapter 45A intervention, and how to remedy these disparities in case referrals. Greater outreach and education may help improve knowledge of Chapter 45A reporting processes among financial institutions, law enforcement, and APS agencies.