As a result, financial services organizations are creating or enhancing their EFE Prevention Programs

These crimes include embezzlement, fraud, identity theft, and scams involving welfare andinsurance.

1 in 5 Americans over the age of 65 have reported being victims of financial abuse.

Research from a 2011 MetLife study suggested that the original estimate of elder abuse due tofinancial exploitation was nearly $3 billion annually. However, a January 2015 report by TrueLink, a financial services firm that helps seniors and their families protect themselves from fraud,exploitation and financial abuse, reported that total losses are more than $36 billion annually.

By 2050, the Census Bureau estimated that 1 in 5 Americans could be elderly, with the greatestgrowth occurring between 2010 and 2030, as the baby boomers enter retirement.

Elder financial exploitation (“EFE”), the monetary abuse of seniors or those who lack themental or physical capacity to protect their own financial interests, is a growing concern of lawenforcement, regulators, and financial institutions.

EFE Prevention Program: Challenges and leading practices

© 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

Enterprise-Wide Fraud Program Framework: End-to-end fraud solutionYour fraud prevention program should be tailored to address and detect common EFE schemes and should be basedon the fraud life cycle to allow for continuous and effective EFE prevention.

Below are some common challenges and sample leading practices which can assist you in tackling thesechallenges head on.

Recent regulatory responses to EFE

Consumer FinancialProtection Bureau(“CFPB”):

Advice, recommendations anda report for financialinstitutions on preventing andresponding to elderfinancial exploitation

CFPB put forth the following Recommendations for banks and credit unions:• Develop, implement, and maintain internal protocols and procedures for protecting

account holders from financial exploitation;• Train employees;• Harness technology to detect elder financial exploitation;• Report suspicious activity;• Protect older account holders from financial exploitation in compliance with

existing regulations; and• Collaborate with stakeholders who support victims (e.g., organizations, law

enforcement, adult protective services) and educate older account holders,caregivers, and the general public about elder financial exploitation.

Financial IndustryRegulatory Authority(“FINRA”):

Proposed Rules: “FinancialExploitation of Seniors andOther Vulnerable Adults(Notice 15-37)”

FINRA proposed the following changes or new rules:• Amending Rule 4512: Requires firms to make reasonable efforts to obtain the

name and contact information for a trusted contact person for a customer’s account.• New Rule 2165: Permits qualified persons of firms to put a temporary hold (15

days) on disbursements of funds/securities from accounts of specified adults, wherethere is a reasonable belief of financial exploitation of these adults with a safeharbor from liability.

Elderly adults are ideal targets for fraud schemes…

…As a result, regulators are developing guidance, rules and regulations, with the potential fornon-compliant firms to face daunting financial and reputational damage.

Elder Financial Exploitation can lead to devastating financial and reputational damage

PwC can help you develop an EFE Prevention Program tailored to your needs

Led by former Deputy Director of the FBI, Sean Joyce, the Financial Crimes Unit (FCU) is comprised of more than 300professionals. Our investigative team includes former officials from the Central Intelligence Agency (CIA), Department of Justice,Federal Bureau of Investigation (FBI), US Attorney’s Office, United States Secret Service, and prominent agencies abroad.

PwC’s Fraud Practice sits within the FCU and brings together our collective fraud expertise in Operations, Forensics and Technologyacross financial services. This enables us to provide a cohesive approach and offer a holistic solution to help our clients beproactive in preventing, detecting, responding to and mitigating fraud.

Our team

Key contacts

© 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

How we can help you enhance your EFE Prevention Program

Sean JoycePrincipalUS Financial Crimes Lead(703) 918 3528sean.joyce@pwc.com

Genevieve GimbertPrincipal(646) 471-5145genevieve.d.gimbert@pwc.com

Brian CastelliPrincipal(646) 471-2563brian.castelli@pwc.com

Tom CiullaPrincipal(646) 471 0519thomas.ciulla@pwc.com

Frank BadalamentiPrincipal(646) 471 1460frank.badalamenti@pwc.com

Keith AndrzejewskiPrincipal(646) 313-3544keith.andrzejewski@pwc.com

PwC’sFinancial

CrimeUnit

Fraud

Anti-bribery& Corruption

Cybersecurity

AML &Sanctions

Protecting elderlycustomers: CFPB

and FINRA step in

ThoughtLeadershipEFE Fraud Program Assessment, Design

and ImplementationFraud Controls EffectivenessAssessment and Remediation Fraud Model and Analytics Enhancement Fraud Investigation and Readiness

Ob

jec

tiv

es

• Perform an assessment of the Fraudmanagement program related to EFE toidentify gaps and vulnerabilities.

• Design and implement a cost-effective andefficient future state operating model,tailored to the needs of the organization inthe prevention, detection and recovery offraud.

• Evaluate the design and effectiveness ofexisting controls, protocols and policies inorder to design an improved controlenvironment.

• Conduct technology evaluation to meet theneeds of EFE regulatory requirements.

• Evaluation of detection systems.

• Develop EFE fraud analytics models for trendanalysis, model optimization, customersegmentation and data quality analysis.

• Build reporting and monitoring dashboardsfor descriptive, diagnostic, predictive andprescriptive analytics.

• Perform retrospective fraudinvestigation to identify root causeanalysis and recommend process andmodel optimization.

• Perform Fraud Investigation Unittransformation and optimization toenhance incident readiness andresponse.

Sa

mp

leA

cti

vit

ies

• Creation of policies and procedures;

• Evaluation of target operating model,focusing on people, process and technology;

• Development of a customer awarenesstraining program;

• Evaluation and enhancement of statereporting and monitoring process.

• Evaluation and enhancement of employee(i.e. financial advisor / teller) trainingprogram specific to EFE;

• Review and build out of EFE red flags;

• Creation of enhanced protective servicesto elderly customers (alerts, limits, etc.).

• Assistance with implementation of systemchanges for obtaining a trusted contact person,holding suspicious disbursements andassociated mechanisms for customernotification;

• Enhancement of rules and behavioral analyticsspecific to monitoring and detecting fraud inthe elder population;

• Development of detective and predictive EFEmonitoring scenarios;

• Optimization of the existing EFE scenarios.

• Evaluation or creation of process andtechnology around temporary holds offund disbursements;

• Creation of customer notificationprocess, including education / trainingprogram for call centers, branches andfinancial advisors;

• Review of headcount dedicated toinvestigating EFE.