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West Virginia Legislative Interims: Experts testify additional policies needed to protect older residents from financial exploitation

By Autumn Shelton, West Virginia Press Association

BERKELEY SPRINGS, W.Va. – The West Virginia Legislature should consider creating additional policies to help protect older residents from financial exploitation, according to experts. 

“Financial exploitation is the biggest silent crime in the United States,” said Legal Aid of West Virginia Financial Exploitation Attorney James L. Lindsay, as he spoke before members of the legislative Joint Committee on Children and Families during their November interim meeting at Cacapon Resort State Park. 

He explained that criminal financial exploitation is defined as the “intentional misappropriation or misuse of funds or assets of an elderly person, protected person or incapacitated adult,” and has a nationwide cost of about $3 billion annually. 

“The usual suspects are computer hackers, identity thieves, IRS scams, jury scams, Medicaid fund scams and grandparent scams,” Lindsay said. “I have dealt with, in one way or another, just about every one of these.” 

However, he said that many scams involve “trusted agents,” which is a person the victim knows. Often the trusted agents are spouses, caregivers, children and grandchildren. 

Citing statistics from 2017, Lindsay continued that there were 15,582 reports of abuse, neglect or financial exploitation filed with Adult Protective Services. Of those, 7,244 cases were investigated as financial exploitation. 

“Our attorneys at Legal Aid, since 2017, have handled around 205 cases of financial exploitation,” Lindsay said. “We have recovered, approaching now, $3 million in civil judgments for our clients.” 

Although the state has a “big toolbox” to fight financial exploitation, it has a “lack of materials,” he added. For this reason, he recommended that legislators create a consumer protection penalty and restitution fund. 

The fund would be “something that could provide consumer enforcement actions, and distribute compensation to eligible consumers and victims,” he explained. “This is something that could be state agency administered with annual reporting.” 

He also suggested that the term “undue influence” become statutorily defined. 

He explained that undue influence is “excessive persuasion that causes a person to refrain from acting in their own interest, and essentially substitutes another person’s interest for theirs.” 

Factors which should be considered in a possible statute for the term undue influence should be victim vulnerability, the influencer’s authority and actions (such as violence, lies and manipulation), and equity of result, he noted. 

The next speaker, Lisa Hopkins, senior deputy commissioner of securities for the state auditor’s office, said that her agency also supports the creation of a consumer protection penalty and restitution fund. 

She said she was thankful for the 2020 passage of the Protection of Eligible Adults from Financial Exploitation Act, referred to as the “Hold and Report Law.” 

“This has been such a valuable tool in preventing and halting financial exploitation of seniors,” Hopkins said. “It requires all financial professionals registered in our borders to notify us and Adult Protective Services if they have a reasonable belief that financial exploitation may have occurred, has been attempted or is being attempted. This allows them 15 days, upon contacting us, to freeze the account, and to try to figure out what is going on and get us documents.” 

She noted her office has been able to help victims in 24 cases through this act. 

Due to lack of financial education and other factors, the older population is vulnerable to financial exploitation, she continued. Yet, it often goes unnoticed. 

She stated that one in six elderly adults are financially exploited each year, and some estimates say that number could be one in four. 

“Only one in 44 cases are reported, so that means this is a perfect storm for fraudsters because this is where the money is, and they are very likely to not get caught,” Hopkins said. 

She said her office is working with AARP and other stakeholders to support any efforts that would protect the state’s residents.