In 2021, Michigan passed the Financial Exploitation Prevention Act (FEPA or Act) which took effect last September. FEPA sets forth new requirements on financial institutions to report financial exploitation of vulnerable adults to adult protective services and law enforcement in Michigan, and was a result of work led by the Department of Attorney General’s Elder Abuse Task Force.
The Elder Abuse Task Force was launched by Attorney General Dana Nessel and consists of more than 55 different organizations in the public, private, and nonprofit sectors working together to combat elder abuse.
FEPA requires financial institutions to develop and implement policies, training, and procedures for identifying and reporting the exploitation of their customers, and allows them to freeze customer transactions or assets. Procedures prescribed by the Act included asking questions during a suspicious transaction, or placing a hold on the transaction for up to 10 days to give law enforcement an opportunity to make sure it’s legit. The financial institutions that comply with FEPA receive immunity from criminal, civil, and administrative liability for actions taken in good faith under the Act.
Exploitation of the elderly is becoming more common each year, with scams ranging from phone calls demanding money, fake investment opportunities, and even family members stealing from elderly relatives. Elderly victims of financial exploitation do not know that they are being taken advantage of, and oftentimes family members are the sole defense against these scams. But staying on top of it everyday can be challenging.
FEPA allows financial institutions to be a second set of eyes to identify exploitation.
The training of professionals to identify abnormal financial activity from their customers can provide early identification of potential scams and theft from elderly persons. Individuals and financial institutions have a vested interest in preventing these scams and FEPA provides another level of protection for both.
In one story from the Traverse City Record Eagle, a conservator appointed to manage the funds of a 95 year old World War II veteran, was charged with stealing over $10,000 from the elderly gentleman. In that case, the conservator spent money at Victoria’s Secret, Joann Fabrics, and made multiple ATM withdrawals. All of these transactions were not typical for the veteran’s account. The intent behind FEPA is to help recognize and stop such fraud on the accounts of elderly customers.
Michigan Attorney General Dana Nessel said “[t]his Act is the result of prioritizing our vulnerable adults through consumer protection measures and education, and financial institutions will play a vital role in preventing exploitation.” The partnership between financial institutions, prosecutors, Adult Protective Services, and law enforcement will result in earlier detection and successful prosecution of those that prey on our vulnerable citizens.”