«The New York State Cost of Financial Exploitation Study June 15, 2016 Page 1 of 94 The New York State Cost of Financial Exploitation Study Yufan ...»
Page 10 of 94 Service agency expenditures were high, with nearly $1.2 million devoted to investigation, assessment, and other related activities within the case review sample. At $541,854, APS costs accounted for approximately 46 percent of all documented agency expenditures. The remaining $641,810 was divided across multiple agencies, with medical- and health-related services accounting for a substantial proportion of service agency costs. Adjusting for missing cases increased the total service agency cost within the 31 participating districts to an estimated $5,078,154. Finally, had data been collected on all referrals across the state for the 12-month observation period, our estimates suggest that over $6.2 million in new agency expenses would have been incurred as a result of financial exploitation referrals.
Public benefit costs:
In addition to agency services, 117, or 13 percent, of the 928 referrals included in the case review study received new or additional public benefits following their referral to APS. As shown in Table 11 (page 39) food stamps or Supplemental Nutrition Assistance Program benefits (SNAP) and Medicaid/Medicare coverage were the most common type of benefits received, while health and housing-related benefits were some of the most costly. The overall cost of these additional benefits was comparable in magnitude to documented service agency costs, with nearly $1.2 million accrued across the 928 referrals. The adjusted costs were approximate $7.5 million and the statewide estimate was $8.3 million.
Across the 479 verified cases, over $24 million was reported in lost assets. The most common loss was monetary, with 42 percent of verified cases reporting cash losses of nearly $8 million. The adjusted losses were approximately $91 million and the statewide estimate was about $109 million.
Within a single 12-month period, known incidents of financial exploitation cost New York State citizens and communities somewhere between $27 and $124 million in personal losses and public expenditures. The summary of costs/losses is shown in the table
Table 1. Costs of financial exploitation referrals received by APS.
Documented Adjusted Statewide Costs Costs Estimate Service agency costs $1,183,664 $5,078,154 $6,280,230 Public benefit costs $1,198,266 $7,549,976 $8,272,554 Victim losses $24,909,287 $90,929,817 $109,048,214 Total Costs/Losses $27,291,217 $103,557,947 $123,600,998
Adjusting victim losses to account for unreported cases:
Page 11 of 94 Research has repeatedly shown that incidents of financial exploitation frequently go unreported to APS and other authorities. A series of projection exercises were therefore undertaken to estimate what the total magnitude of victim losses might be if information on losses were captured for both reported and unreported cases. Low and high end estimates were generated based on previous research which found that for every one reported financial exploitation case, somewhere between 10 to 44 cases went unreported (National Center on Elder Abuse, 1998; Lifespan, Weill Cornell Medical Center, New York City Department of Aging, 2011). Estimates indicate that, within our 31 participating districts, the total monetary value of assets taken from seniors within the 12-month period may have ranged from a low of $352 million to a high of $1.5 billion.
Such findings suggest that prior efforts to quantify victim losses may have grossly underestimated the magnitude of losses experienced by financial exploitation victims.
Recommendations for Next Steps
1. Additional research studies on the fiscal impacts of financial exploitation in New York State and nationwide are needed.
Many of the fiscal impacts presented in the current study are exploratory estimates that merit further testing. Statewide estimates assume that the county matching criteria used were sufficient to identify districts with similar types of financial exploitation incidents and system responses. However, districts were not matched on several potentially influential variables, such as size and nature of the vulnerable adult population, community culture, and service infrastructure. It is therefore likely that the prevalence and magnitude of financial exploitation incidents may have differed substantially across matched counties, altering costs. Future research should seek to address these limitations.
2. Existing state data collection systems should be expanded to include standardized fields for reporting financial exploitation elements and costs.
It is important that the types of information collected for this study on the costs of financial exploitation, demographic characteristics, and outcomes not be a one-timeonly event, but a baseline for future reporting. It is important to look for ways to incorporate this type of reporting into existing APS systems and to encourage other systems to collect similar information. To do this, APS and its partners need access to better tools to help organize the collection and review of financial documents.
3. Training opportunities for APS workers should be expanded.
The fact that 49 percent of study referrals included clients with physical impairments and 54 percent of referrals included clients with mental impairments and/or dementia points out the need for continued and enhanced training for APS workers and other investigators on the characteristics of these populations and how best to interview and serve such persons. Similarly, the fact that at least 20 percent of referrals included clients identified as black or Hispanic indicates a need for APS workers and other service providers to have additional training on diversity/cultural competency issues.
Page 12 of 944. Expand the use of Multidisciplinary teams.
As study findings demonstrate, financial exploitation has devastating effects on individuals and communities. New approaches to preventing, assessing, and serving vulnerable adults are needed to decrease incidents and improve service delivery for those impacted. A multidisciplinary team approach has been shown to result in better protection of vulnerable adults, more prosecutions, and more civil actions (Navarro, Gassoumis, & Wilber, 2013; Hafford, Nguyen, & Henning, 2015).
5. Encourage victims to seek help
Because family members and spouses/partners were named as perpetrators in over 60 percent of APS referrals, and since so many victims refuse to press charges, there is a need for creative approaches to stopping the financial exploitation (and other abuse or neglect that may be co-occurring) while providing alternatives to incarceration that may encourage victims to simultaneously seek help for family perpetrators and stop the financial exploitation and other abuse.
6. Encourage additional training resources for law enforcement Many of the cases referred by APS to law enforcement do not result in arrest or prosecution, pointing out the need for additional training and resources to be available for police, sheriffs and prosecutors on financial crimes against vulnerable adults.
7. Encourage additional training resources for financial institutions and fiduciaries.
The OCFS Bureau of Adult Services has developed, arranged and presented, often with other state and local partners, and in conjunction with associations of financial professionals, several trainings of financial professionals on the topic of recognition, prevention and reporting of financial exploitation of vulnerable adults (see Appendix A).
However, more needs to be done to provide trainings to both financial institutions and fiduciaries who are responsible for managing funds on behalf of their clients.
Page 13 of 94 Introduction After her home was damaged during Hurricane Sandy, Lisa,2 a 79 year-old woman with possible dementia, was provided with emergency housing at a local nursing home.
While there, she became friendly with a member of the nursing home staff named Shirley. Shirley invited Lisa to move in with her and began helping Lisa to manage her affairs. Since granting Shirley power of attorney, Lisa’s savings account was depleted by several thousand dollars and a property she owned was put up for sale. Stating Shirley has only her best interests at heart, Lisa refused to speak with the Adult Protective Services worker alerted to her situation by a concerned family member.
Lisa’s story is just one example of the types of cases brought to the attention of local Adult Protective Services (APS) offices in New York State each year. In New York, APS serves adults age 18 or older who, due to physical or mental impairments, are unable to protect themselves from abuse, neglect, financial exploitation or other harm and have no one available who is willing and able to assist responsibly. APS clients are often referred to as vulnerable adults. 3 Like Lisa, many vulnerable adults become targets for a form of adult abuse known as financial exploitation. Financial exploitation occurs when individuals steal and/or misuse a vulnerable adult’s financial assets and property for their own personal gain, often without the informed consent or knowledge of their victim. When financial exploitation occurs, individuals, families and communities are all adversely affected. The vulnerable adult may lose his/her capacity to pay for rent, food, and medicines and may become ill, fearful or depressed. Families may find it necessary to step in and provide care and housing for relatives who were once financially independent. At the community level, adult protective services may be called in to investigate, and government benefits and agency services, including food, housing, and health care assistance, may be needed to compensate for stolen assets.
While the potential consequences of financial exploitation are devastatingly clear, research on financial exploitation is remarkably sparse. What we do know suggests the problem is widespread. Each year, approximately five million Americans aged 60 or older are estimated to be financially exploited (Eldercare Locator, n.d.). In New York State alone, the number of APS referrals involving financial exploitation allegations increased more than 35 percent growing from 4,204 reports in 2010 to 5,671 in 2014.
In addition, prevalence studies suggest that only a small proportion of financial exploitation cases are ever brought to the attention of local authorities. For every financial exploitation case referred to authorities, experts estimate an additional 10 to 44 cases go undetected (Lifespan, Weill Cornell Medical Center, New York City Department of Aging, 2011; National Center on Elder Abuse, 1998).
To protect individual privacy, all names used in this and subsequent synopses of case studies have been changed.
For a more detailed description of APS in New York State, see Appendix A.
Page 14 of 94 The magnitude of the societal costs and personal losses associated with financial exploitation, however, are largely unknown. Verifying exploitation in referrals made to APS can be complicated, as the vulnerable adult involved may be unaware, unable, or unwilling to discuss the allegations surrounding their case. Similarly, even when an APS worker’s investigation leaves them feeling confident that financial exploitation has occurred, victims’ vulnerabilities and the nature of the exploitation itself may make it difficult to ascertain the exact value of the items lost.
Nationwide, only a handful of studies have attempted to attach a price tag to financial exploitation. Using a unique approach built around examples of financial exploitation reported in the media, MetLife estimated national losses experienced by seniors each year to be in the billions (The MetLife Mature Market Institute, 2009; 2011). At the state level, Utah used data taken from a small sample of APS referrals to estimate statewide impacts (Gunther, 2011). Findings suggested statewide losses ranged between $48 and $209 million.
To learn more about incidents of financial exploitation in New York State and the fiscal impacts associated with these cases, the New York State Office of Children and Family Services (OCFS) conducted a groundbreaking study of financial exploitation in New York State in 2013. As described in the current report, the purpose of the study was
1. To provide a descriptive, baseline picture of the types of financial exploitation cases being reported to APS offices within New York State.
To provide a comprehensive view of financial exploitation in New York State, the present study examined over 900 APS referrals made within a 12-month period across 31 local social services districts. Collected information included data on referral sources, client health and daily living needs, perpetrator characteristics, exploitation methods, APS outcomes, and victim impacts.
2. To estimate the fiscal impacts associated with financial exploitation referrals in New York State at the county and statewide level.
Individuals, communities, and government programs are all negatively impacted when financial exploitation occurs. When a referral is received, APS and other agencies provide investigation, assessment, and case management services to alleged victims (aka clients). In addition, APS workers connect clients to programs and services that support their health, well-being, and independence.
In cases of financial exploitation, this often means helping the vulnerable adult obtain resources (food, housing, health care, etc.) and/or public benefits to compensate for lost financial assets. As part of the present study, APS workers were asked to document the value of investigative, support, and public benefit services incurred for all referrals involving allegations of financial exploitation.
Data were then used to calculate the service agency and benefit costs incurred across participating districts for all referrals, and to estimate these costs statewide.
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3. To estimate the fiscal impact of financial exploitation on New York State victims.