The 2018 National Association of Attorneys General (NAAG) Presidential Initiative, “Protecting America’s Seniors: Attorneys General United Against Elder Abuse,” has come to a close with a summit held April 17-18 in Manhattan, Kansas, capping off an eight-month campaign during which state AG offices have augmented and sharpened their tools for investigating exploitation of this vulnerable population.
The initiative, selected by current NAAG president Derek Schmidt, Kansas Attorney General, has brought AGs from around the country together to build state expertise on this issue and to fight elder abuse, neglect and exploitation. It has included a focus on financial exploitation as part of a broader look at how financial services industry interacts with the elderly.
While some of work around the initiative has focused on consumer scams and how AG offices are fighting bad actors, the general consumer protection goal of this initiative includes studying how all companies that provide services to the elderly can be sensitive to the unique needs of this demographic. At the summit, the interim dean of the University of Southern California Keck School of Medicine, Laura Mosqueda, spoke about the medical dynamics of aging, while representatives from various AG offices broadly described how they use prevention, education, and outreach in senior consumer protection.
In his opening address for the summit, Attorney General Schmidt pointed out that this demographic merits particular protection due to their wealth and vulnerability, and thanked AGs around the country for joining with him to make this issue a priority.
Companies in the financial industry sector should be aware of the states’ focus on elder exploitation. Outright scams are not the only dangers for the elderly—avoiding unfair or deceptive practices that include unclear lending terms or misleading advertising of financial services are top of mind as well for the states.
Recent collaborations between the U.S. Department of Justice (DOJ) and state attorneys general have highlighted the broad effort by the states to address the problem of elder abuse, not only physical abuse but financial and other exploitation as well.
In February, Attorney General Jeff Sessions and AG Schmidt announced a coordinated, bipartisan effort to conduct the largest elder fraud sweep in history. Charging over 200 defendants and bringing civil actions to seek justice for the more than one million Americans that collectively lost over half a billion dollars to elder fraud schemes, the sweep is one attack vector in the NAAG presidential initiative.
The DOJ ordered every U.S. Attorney’s office to designate an elder justice coordinator in early 2018, although state attorneys general on both sides of the political spectrum have supported the initiative on their own accord in a variety of other ways, including promoting education related to avoiding scams and other forms of victimization and prosecuting cases. For example, Georgia Attorney General Chris Carr obtained a $500,000 judgment as a result of an investigation into Alarm Protection Georgia, LLC relating to alleged Unfair or Deceptive Acts or Practices (“UDAP”) violations regarding the procurement of 5,812 door-to-door sales contracts, sixty percent of which were obtained from the elderly or disabled, and Nevada Attorney General Adam Paul Laxalt released an Elder Abuse, Neglect and Exploitation Guide in January and recently announced an elder exploitation and guardianship abuse criminal prosecution involving two felony counts.
In March, Virginia Attorney General Mark Herring filed a complaint in the Circuit Court for City of Hampton alleging violations of the Virginia Consumer Protection Act (“VCPA”) (“misrepresenting that goods or services have certain quantities, characteristics, ingredients, uses, or benefits” and “using any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction”) related to an illegal “pension sale” plan that deceived over 600 Virginia citizens, particularly targeting older veterans. The complaint alleges Future Income Payments LLC, among others, engaged in a predatory loan scheme by concealing loans as sales through deceptive tactics such as billing as a buyer rather than a lender and relabeling common loan terms with sales terminology. The loans allegedly had interest rates of up to 183%, in one instance requiring a veteran to pay $40,920 over the course of five years for a $5,500 loan.
Some jurisdictions specifically address elder abuse in UDAP law provisions. For example, Florida prioritizes orders of restitution or reimbursement over civil penalties (which may be $5,000 more than a regular civil penalty) for UDAP violations against senior citizens, defined as those over the age of sixty, and Georgia provides for an additional civil penalty of up to $10,000 for certain UDAP violations against elder people, also defined as those over the age of sixty. See Florida Statutes § 501.2077; Georgia Code § 10-1-851. A recent lawsuit by the Pennsylvania Attorney General in response to a data breach includes an alleged violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (73 P.S. §§ 201-1 – 201-9.2) for concealment and refusal to provide notification to individuals affected by the breach, which may lead to an additional civil penalty of up to $3,000 for victims over the age of sixty. See 73 Pa. Stat. § 201-8. In California, knowingly causing a vulnerable senior citizen actual substantial physical, emotional, or economic damage as a result of a loss of income or substantial loss of certain property or assets may lead to treble damages. See Cal. Civ. Code § 3345.
As the states in tandem with federal prosecutors zero in on how the nation’s elders can fall victim to exploitation and unfair financial schemes, it is important that those industries that count the elderly among their customers take a step back to consider how their practices affect that demographic and how they might work with these regulators toward a solution. While AG Schmidt’s presidential initiative has drawn to a close, the increased resources in each state AG office that have been increased and fine-tuned as part of this effort will not become irrelevant. With the nation’s population of Baby Boomers making this demographic more high-profile than ever before, we can expect the states to continue to scrutinize businesses who serve this population, notably including the health services industry.