CNA logoStrategies for Preventing Theft and Minimizing Risk

According to the 2011 MetLife Study of Elder Financial Abuse, older Americans are defrauded of an estimated $2.9 billion per year, with a third of this loss attributed to family, friends and caregivers. In response, 26 states either enacted or proposed legislation in 2012 to combat financial exploitation of elderly and vulnerable adults. (See the National Conference of State Legislatures’ Financial Crimes Against the Elderly 2012 Legislation, updated January 2013.)

A review of CNA claims reveals that theft of client funds and property is a significant liability exposure for home care providers, as illustrated by the following actual cases:

  • Police arrested a caregiver on disturbance charges. While searching her apartment, they found checks, ID and credit cards belonging to a client. The caregiver confessed to having stolen from the client for over two years.
  • A client who had poor vision provided signed blank checks, so her caregiver could make purchases on the client’s behalf. The caregiver used some of the signed checks to make personal purchases, a pattern that continued for two years before it was discovered.
  • A caregiver went to the home of a client, whom he knew to be on vacation. The caregiver was on the approved guest list of the gated community and was permitted inside, whereupon he took $4,000 in cash that he knew the client kept hidden in a suit pocket.

To reduce the risk of theft, home care providers should consistently implement, enforce and document the following hiring, employment and security measures:

Pre-employment Screening
Application process. Require prospective employees to complete, sign and date a detailed application that includes their job history, an explanation of employment gaps and the reason why they left their most recent position.

Interview. Utilizing behavior-based interview questions and reliable personality profile assessment tools, ascertain whether candidates possess the requisite integrity, decision-making ability and communication skills, as well as a caring and respectful manner.

References. Verify candidates’ information by contacting at least two personal references and all recent employers. Document the results of reference checks.

Criminal background checks. Conduct background checks, noting that employee theft policies automatically terminate coverage for a staff member once the employer becomes aware that he or she has engaged in dishonest conduct. Consult with legal counsel before offering or denying employment to applicants who have been convicted of a crime.

Drug and alcohol testing. Implement a drug and alcohol testing policy in compliance with state and federal guidelines, and in consultation with legal advisers.

Employment Policies
Gift giving. Company policy should prohibit caregivers from accepting money or valuable gifts from clients, and from assisting clients on their personal time.

Employee monitoring. Supervisors should make and document periodic unannounced telephone calls, and conduct occasional unscheduled in-person interviews with clients and family members. Questions should cover such issues as payment arrangements and undue caregiver influence.

Incident response. Allegations of theft or abuse should be reported immediately to police, and suspected employees suspended from duties during the investigation.

Client Safeguards
Property and cash. Instruct the client to place valuables in safekeeping, such as a safe deposit box or other secure location, and to limit the availability of cash in the home.

Inventory. Maintain an inventory of unsecured valuables at the client’s home, requesting that the client or a responsible family member sign the list.

Payment methods. Minimize caregiver handling of the client’s money and credit cards, and explore alternative means of payment, such as direct billing or automatic debit.

Financial records. Require caregivers to provide receipts for all expenditures made on behalf of the client.

Information security. Prohibit caregiver access to sensitive client information, including bank account numbers, passwords and personal identification numbers.

Theft- and fraud-related occurrences can be both costly and traumatic for clients, family members and home care providers. Effective hiring, supervisory and security practices are essential to protect clients and minimize liability exposure.

The information, examples and suggestions presented in this material have been developed from sources believed to be reliable, but they should not be construed as legal or other professional advice. CNA accepts no responsibility for the accuracy or completeness of this material and recommends the consultation with competent legal counsel and/or other professional advisors before applying this material in any particular factual situations. Please note that Internet hyperlinks cited herein are active as of the date of publication, but may be subject to change or discontinuation. This material is for illustrative purposes and is not intended to constitute a contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. Use of the term “partnership” and/or “partner” should not be construed to represent a legally binding partnership. CNA is a registered trademark of CNA Financial Corporation. Copyright ©2013 CNA. All rights reserved.