31st Dec 2013

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 twenty-eight 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 various parties, whether a professional con artist, a paid caregiver, or unscrupulous family members.  Often aging involves some loss of executive function, although this varies at different ages.  Further, the 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.

Anecdotally, in the author’s experience, there is much financial fraud in the senior community.  An unsuspecting senior is often trusting or mentally or physically vulnerable, and does 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 at excessive rates, or for unnecessary services.

By way of historical perspective, Colorado has had a voluntary reporting statutory scheme for some years that encouraged people to report such abuse, and provided immunity from civil suit if so reported.  In the past, that basically meant that, if you observed elder abuse or fraud, and reported the same to the authorities, you would achieve immunity for doing so.  However, parties were not required to do so, and very few people even knew of the law.

The Elder Abuse Task Force was appointed in 2012 and charged with studying the issues and proposing legislation.  The Task Force comprised of numerous parties from law enforcement, legal, non-profit and health care communities.  The Task Force studied laws in other jurisdictions, concluding that mandatory reporting will identify elders in need of help, and also that a real need for funding adult protective existed.

The Colorado Legislature passed Senate Bill 13-111’s mandatory reporting requirements, which was signed by the governor on May 16, 2013, and will 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.

So, how does the new statutory scheme play out?  First of all, the new law defines an at-risk elder as any person who is seventy years of age or older.  C.R.S. § 18 6.3-102(d).   The Code states:  “On and after July 1, 2014, a person specified in paragraph (b) of this subsection (1) who observes the abuse or exploitation of an at-risk elder, or who has reasonable cause to believe that an at-risk elder has been abused or has been exploited or is at imminent risk of abuse or exploitation, shall report such fact to a law enforcement agency not more than twenty-four hours after making the observation or discovery.”  Who is a party so required to engage in mandatory reporting:  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 seventy, Colorado’s criminal code now provides you with a mandatory duty to report the elder fraud you observe to the law enforcement agency in your county.  § 18-6.5-108.

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:  “A person who willfully violates paragraph (a) of this subsection (1) commits a class 3 misdemeanor and shall be punished in accordance with section 18-1.3-501.”   Further, “Any person who exercises undue influence to convert or take possession of an at-risk elder’s money, assets, or other property commits theft, as defined in section 18-4-401.”  C.R.S. § 18-6.5-103.  Please note, other 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 provide the reporter with immunity from any civil action that might result in connection with such report.  Your report to law enforcement will trigger the law enforcement agency’s duty to report same to the appropriate social services department in the relevant county within twenty-four hours.  C.R.S. § 18-6.5-108(2)(b).  This may trigger more investigation, including a home visit or other proceedings.

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 if you question whether financial exploitation is occurring, and to educate Colorado professionals, caretakers, family members and others about the mandatory duty to report, and encourages other parties to report voluntarily.  Again, this statutory scheme was adopted in order to protect our seniors, and to grant immunity to those who do report.  The parties with mandatory reporting obligations will have a learning and training curve with their employees, but the take away message is to encourage folks to protect their elders and to encourage reporting.

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