Elder Financial Exploitation: FinCEN Advisory FIN-2022-A002 Red Flags and SAR Key Term

Elder financial exploitation is one of the few financial crimes where the warning signs often show up in a conversation before they show up in the data. In June 2022 the US Financial Crimes Enforcement Network (FinCEN) issued advisory FIN-2022-A002, which updated its earlier guidance and gave financial institutions a fuller list of behavioural and financial red flags. This guide walks through what the advisory says, how it separates theft by trusted people from scams by strangers, and what it asks firms to put in a suspicious activity report (SAR). Mule accounts often sit at the end of these scams, so it helps to read this alongside our guide to money mules and account misuse.

What the advisory means by elder financial exploitation

FinCEN defines elder financial exploitation as the illegal or improper use of an older adult's funds, property or assets. For the purposes of the advisory, an older adult is someone aged 60 or over. It is one form of elder abuse alongside physical and emotional abuse, and FinCEN notes that definitions vary from state to state.

Two different problems: elder theft and elder scams

The advisory splits the activity into two types, and the red flags differ for each.

Elder theft by someone the victim knows

Here the perpetrator is usually known and trusted: a family member, a non-family caregiver, a neighbour, a friend, a financial services provider or a business associate. FinCEN says these people often use deception, intimidation or coercion, and often take advantage of cognitive or physical disability and social isolation. In its analysis of reports filed between 2013 and 2019, FinCEN found that family members were involved in 46 per cent of elder theft cases. Tactics it lists include abusing guardianship or power of attorney arrangements, pushing victims into fraudulent investments, liquidating savings or retirement accounts, diverting benefits and income, transferring property, and running up credit cards in the victim's name.

Elder scams by strangers or imposters

In scams, the perpetrator often has no prior relationship with the victim and is frequently based outside the United States. Contact comes by phone, text, email, post, dating apps, social media or in person. The advisory describes several scam types: government imposter scams, romance scams, emergency or "person in need" scams (the grandparent scam), lottery and sweepstakes scams, and tech or customer support scams. FinCEN reports that romance scam losses reached a record 547 million US dollars in 2021.

The payment methods it lists are worth knowing: wire transfers through money services businesses, prepaid cards, gift cards, money orders, cash sent by tracked post, ATM deposits, cash collected from the victim's home and convertible virtual currency. The advisory also warns that victims can be recruited as money mules without realising it, which can leave them facing prosecution, repayment demands, credit damage and further identity theft.

Behavioural red flags

FinCEN asks firms to record behavioural red flags in the SAR narrative, along with the names of the staff who saw them. Examples from the advisory include:

• A customer who seems distressed, submissive or fearful, cannot answer basic questions about the account, or follows instructions from someone else.
• A customer taking direction from someone on the phone during a transaction, and seeming nervous or unwilling to hang up.
• A customer urgently wanting to send money to an unrelated third party for a loved one's supposed emergency.
• A customer who mentions an online friend or romantic partner asking them to receive and forward money or open an account for a business opportunity.
• A caregiver who shows excessive interest in the customer's finances, speaks for them, or stays close during conversations.
• A new caretaker, relative or friend carrying out transactions without proper documentation.
• Sudden changes to a power of attorney, trust or estate plan, particularly where undue influence, coercion or diminished capacity may be involved.
• The firm being unable to reach the customer directly despite repeated attempts, or sudden changes to contact details.

Financial red flags

The advisory's financial indicators include:

• A dormant account with a large balance that suddenly shows constant withdrawals.
• Large purchases of gift cards or prepaid cards.
• Sudden interest in buying or discussing virtual currency.
• Cheques or wires with memo entries such as "tech support services", "winnings" or "taxes".
• Frequent large cash withdrawals, including daily maximum ATM withdrawals.
• Money sent interstate or abroad to people the customer has no in-person relationship with, where the explanation seems suspicious.
• Sudden or frequent non-sufficient funds activity.
• Closing certificates of deposit or accounts without regard to early-withdrawal penalties.

As with other FinCEN advisories, no single red flag is determinative. Firms are asked to weigh the customer's history, whether activity fits normal patterns, and whether several indicators appear together.

Filing the SAR

A SAR is required where a firm knows, suspects or has reason to suspect that a transaction involves illegal funds, is designed to evade Bank Secrecy Act requirements, has no apparent lawful purpose, or facilitates criminal activity. For this advisory, FinCEN asks filers to put the key term EFE FIN-2022-A002 in the filing note to FinCEN and in the narrative, and to tick the elder financial exploitation box on the form. For Form 8300 filers, it points to the suspicious transaction box and the same key term in the comments.

The advisory also lists good practice that is not a regulatory requirement. This includes stating the victim's age and location, describing how the firm responded (for example closing an account or giving a fraud warning), noting amounts and refunds, referring to supporting material such as photographs or video, and recording any report made to the police or Adult Protective Services.

Two reminders matter in practice. Firms should keep a SAR and its supporting documentation for five years. And filing a SAR does not replace any state law duty to report suspected exploitation to law enforcement or Adult Protective Services. FinCEN also encourages voluntary information sharing under section 314(b), covered in our guide to FinCEN section 314(b) information sharing, and notes that its Rapid Response Program has helped recover more than 1.1 billion US dollars from cyber-enabled fraud.

Why this matters beyond banks

If you work in accountancy, wealth management or a professional practice, you may be the person who notices a client's finances changing before anyone else does. The same habits apply: speak to the client directly, be cautious when someone else answers for them, and be alert to sudden changes to powers of attorney or estate arrangements. For the wider legal picture on US reporting duties, see our Bank Secrecy Act explainer, and for structured training on these controls, take a look at our CPD courses.

What we could not confirm

We worked from FinCEN's June 2022 advisory. We have not checked whether FinCEN has issued later guidance that changes the key term or form boxes, so check the current FinCEN advisory page before you file. The statistics above are as FinCEN reported them at the time.

Frequently asked questions

What is advisory FIN-2022-A002?

It is FinCEN's advisory of 15 June 2022 on elder financial exploitation, which updates the red flags and filing guidance for financial institutions.

Who counts as an older adult?

For the purposes of the advisory, FinCEN treats anyone aged 60 or over as an older adult.

What key term should a SAR use?

FinCEN asks filers to use "EFE FIN-2022-A002" in the filing note and the narrative.

Does filing a SAR replace reporting to Adult Protective Services?

No. FinCEN states that a SAR does not replace any state law requirement to report suspected exploitation to law enforcement or Adult Protective Services.