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Posted: October 18, 2013

Financial exploitation of the elderly

Colorado has a new mandatory reporting law

Joanna Kitto

If you are a doctor, nurse, caretaker, health care provider, banker or a financial professional, this article contains important information for you regarding changes in Colorado law, requiring certain parties to report financial fraud or elder abuse. This article focuses more on financial defrauding, although much of the statute is geared toward those who report physical abuse.

Colorado’s elderly population is steadily increasing, and will increase by at least 28 percent by 2017, and by many times that factor by 2030.  Older adults own much of the country’s wealth. All seniors, regardless of net worth, are at risk.

Abuse is perpetuated by various parties, whether a professional con artist, a paid caregiver or unscrupulous family members. Vulnerability is exacerbated in cases of dementia, Alzheimer’s and other disease. For each case of reported elder abuse, it is estimated that there are five unreported cases.  

An unsuspecting senior is often trusting or mentally or physically vulnerable and might not understand that signing a power of attorney giving an unscrupulous caretaker or relative very broad powers over the senior’s finances has the potential to result in irresponsible spending or conversion of assets, and that such actions will erode assets the senior needs as they age.

A senior can also face pressure to make significant lifetime gifts to parties, even where the senior is not in a position to make gifts.  Identify theft can occur, and credit cards can be opened in the senior’s name and used by the abusing party. Contracts can be signed for services that are unnecessary or exorbitantly priced.

Colorado has had a voluntary reporting statutory scheme for some years that encouraged people to report such abuse and provided immunity from civil suit. But parties were not required to report, and very few people even knew of the law.

The Elder Abuse Task Force, appointed in 2012, studied the issues and proposed legislation. Senate Bill 13-111’s mandatory reporting requirements become effective on July 1, 2014. It should be noted that the mandatory reporting requirements are not unusual; in fact, the Legislature recognized that Colorado was one of only three states that did not require certain professionals to report the abuse or exploitation of at-risk elders.

The new code regarding mandatory reporting for abuse of at-risk seniors is akin to statutory schemes that have been in place for years requiring certain parties, such as a doctor or teacher, to report observed child abuse.  The deadline for requiring mandatory reporting next year presumably gives organizations time to train their employees on the recognition and reporting of financial exploitation of seniors.

Those required to engage in mandatory reporting include doctors, nurses, dentists, emergency medical care personnel, psychologists, caretakers (paid or unpaid), a clergyperson, a banker or a party at a “financial institution” who has observed a situation that would make a reasonable person believe that fraud was occurring that will negatively impact a person over the age of 70.

Reporting is required to law enforcement within 24 hours, and the law enforcement agency is required to report to the appropriate social services department in the relevant county within 24 hours. This might trigger more investigation, including a home visit or other proceedings.

Exploitation is defined in more depth, but the most pertinent definition here is that exploitation happens when a person “uses deception, harassment, intimidation, or undue influence to permanently or temporarily deprive an at-risk elder of the use, benefit, or possession of his or her money, assets, or property.” 

Other exploitation is defined as providing services in some different contexts. The code provides that financial exploitation is a crime.

Please note: Parties not specifically listed in the statute, such as concerned neighbors, relatives, or community members, may also report on a voluntary basis.  Whether mandatory or voluntary, such reporting benefits you personally (or your organization), because the code will provides immunity from any civil action that might result in connection with such reporting.

Conclusion

The issues raised by the new reporting requirements will require a case-by-case analysis, and the application will not always be clear-cut, especially when parties who exploit elders usually tend to take action to conceal their actions, or to isolate the senior from observers. However, the goal of this statutory scheme is to encourage a culture of reporting, to protect our seniors, and to grant immunity to those who do report.

Joanna Kitto is an attorney and partner in the business law firm of Ambroziak Kitto, LLC. More information can be obtained at www.ambroziak-kitto.com or from her at jo@ambroziak-kitto.com.

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