Question - how do we balance reporting suspected elder financial abuse and the new privacy regs?

We have a situation where an elderly customer is coming in every week with two "caregivers" and withdrawing a significant amount of cash. Each caregiver will withdraw a few thousand from his account (with his authorization) and then he will withdraw a couple thousand. The customer is wealthy but may be borderline on senile. His son is also a customer of our bank but apparently doesn't know this is taking place.

Question - can we call the Elder Abuse hotline (here in California) with our suspicions without violating Privacy? I am pretty sure we cannot say anything to the son, which is somewhat frustrating because it seems likely the son will be very upset if/when he finds out.

It's sad to see the money walk out the door because a customer is potentially being taken advantage of - but we have to be careful we don't set ourselves up for a violation/lawsuit/etc.

[This message has been edited by Bonnie M (edited 11-06-2001).]

I see no one's responded . . . so I'll bite. We compliance officers think of ourselves as quasi-law-enforcement officials at times, but in this case, I'm going to give some plain-folks type non-compliance advice. Since your bank is personal enough that you know this customer's son, I think I'd talk to the son about what's been observed. The privacy reg is designed to protect consumers, and who's the consumer here? The father - - and if you think he's not the type to raise a big stink on a privacy issue, I'd contact the son. Be factual about what's been observed, be discreet, not accusatory, and then let the son pursue whatever action he deems appropriate. I'd keep the state out of it for now unless son does nothing. OK CO's, let me have it if you disagree . . .

[This message has been edited by Ken Holmes (edited 11-07-2001).]

[This message has been edited by Ken Holmes (edited 11-07-2001).]

I'll bite, too. Couldn't speaking with the son be considered a .15 exception in that you would be disclosing NPPI in order to protect against or prevent actual or potential fraud, or you would be disclosing to a person holding a legal or beneficial interest (son, heir)relating to the consumer?

Definitely not my employer's opinion.

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Bonnie, this sounds like suspicious activity and reportable as such. Whether a possible intent to commit fraud or possible structuring, you definately have suspicious activity. As a CO, I would certainly have a concern about privacy. However, I would take the problem to Sr. Management and let them make the decision on whether they want to take the risk and talk to the son or not. Obviously it depends on the bank's relationship with the son. It's a tough call, and most of all extremely hard to turn your back on something like this. Thanks to GLBA for making our jobs more difficult and making us paranoid about protecting a customer from being taken what is probably
his life's savings. Good luck!

Thank you for your responses. And I certainly hope some regulator-types are reading this!

I guess part of the reason we are gun shy is because we just settled a very nasty lawsuit involving a deceased customer, his widow, and his sons. The widow accused the bank of disclosing information to the sons (his sons - not hers) in violation of her wishes.

I agree that we should contact the hot line. The question of notifying the son is still up in the air.

I guess what I would like to see are some OFFICIAL guidelines as to what information we can give to the hotline vs. what would be stepping over the line.

I think we would ALL like to do the right thing, I just don't want to be punished for doing it.

If you suspect abuse, I believe it would be appropriate to contact Adult Protective Services. This organization will then contact family members if necessary.

Bonnie M:

The other folks have made some excellent suggestions. I'd like to add mine, including:

1. Contact your examiner and ask for written guidelines about how the agency wants you to handle the situation;
2. Call the customer and have ask him to meet you in private to discuss his account;
3. Call your local law enforcement agency and ask if the agency is currently working an investigation concerning your customer or either of the "caregivers";
4. Consider freezing the account for a reasonable amount of time that your legal counsel suggests, pending further investigation;
5. Consider contacting WeTip or a similar organization with your observations, and report your suspicions anonymously; and
5. Document your efforts and update your bank's legal counsel periodically.

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Dana Turner
Security Education Systems
danaturner@bankersonline.com
830-535-6500

Dana, can you give us more info on WeTip. I'd like to use your tips in training but had never heard of this organization.