Doing Business with the Elderly
Nothing stirs the passions of a compassionate adult, quite like the thought of abuse to individuals who are unable to protect themselves, such as children, persons with intellectual disabilities, and vulnerable elderly citizens.
In almost all states, there are laws on the books to help protect such individuals from abuse, neglect and financial exploitation.
The Challenges of Doing Business with the Elderly
Business with the elderly can present problems if the elderly person is vulnerable at the start of, or becomes vulnerable during the business agreements.
Doing business with the elderly presents a particularly challenging area for businesses. This is because many elderly people are not vulnerable, and those who may be vulnerable may not show any signs or symptoms, except at different times of the day or under differing circumstances. Furthermore, the elderly are adults, and those adults who don’t show signs of vulnerability appear to be just like every other adult, and therefore capable of entering into contracts, requesting services and otherwise making important decisions.
Further, it’s possible an elderly adult legitimately and validly enters into a contract one day, and then a few weeks, a few months, or a few years later, that same elderly adult becomes a vulnerable adult. Everyone is different. The onset of a debilitating condition can happen to someone in their 50’s or in their 90’s. It can take hold within the span of months or years.
How does this effect your contract or relationship to such a person?
What happens to the business that thinks it’s dealing with an ordinary adult, but instead is actually dealing with a vulnerable adult? Or, what happens if your customer is an ordinary adult one month, then becomes a vulnerable adult the next month?
The general rule is, like children under 17, contracts are not enforceable against vulnerable adults. This general rule is subject to many exceptions, depending on the circumstances. For example, a “Power of Attorney” (or POA) is a contract, but how can a vulnerable adult sign a POA and have it be enforceable? At least two ways, depending on your jurisdiction and the circumstances: Either by having a doctor sign an affidavit attesting that the vulnerable adult was lucid and capable of making decisions at the time of signing the POA, or seeking court intervention.
What does this have to do with your business and a vulnerable adult as a customer?
We as a society have a duty to protect vulnerable persons and vulnerable adults, but this is an inaccurate science at best, especially as symptoms just begin to take hold and it requires the expertise of a social worker or doctor to determine whether an adult is actually vulnerable or not.
The problem for businesses is, once an adult moves into the protected class, new rules, laws and legal liabilities start to apply, that can hold you and your business accountable (criminally and financially). And, that doesn’t say anything for the potential losses your business may incur, if it can no longer enforce its contract. Worse, your standard business practices — which would be viewed as completely acceptable when dealing with ordinary adults — could actually set the stage for abuse and financial exploitation for vulnerable adults.
Requirements When Dealing with Vulnerable Adults
The main thing to keep in mind when dealing with vulnerable adults is that it is your duty to report any kind of abuse to the proper authorities.
Contracts may not be enforced as against vulnerable adults. In most jurisdictions, if you have “reasonable cause” to suspect a vulnerable adult is being abused, neglected or exploited, you have a duty to report it. In New Mexico, anyone having such reasonable cause of abuse, neglect or exploitation must report it to Adult Protective Services Division by calling them toll-free at 866-654-3219 or 505-476-4912. See 27-7-30 NMSA 1978.
If your business provides certain types of care, it may have very specific legal requirements. For example, residential care facilities in New Mexico are subject to the Resident Abuse and Neglect Act, amongst other rules and regulations in New Mexico. If you have employees or independent contractors who you know or have reason to know may come into contact with vulnerable adults, you have a legal duty to perform regular background checks on those employees and independent contractors.
Vulnerable adults need to be protected from “financial exploitation” from predators. How does one distinguish from a standard business contract with a legitimate business versus some scam associated with a predator? How does one distinguish an ordinary, vanilla “breach of contract” dispute between two parties, versus a case of “financial exploitation” from a crooked or sham business? In New Mexico, 27-7-16(I) NMSA 1978 defines “exploitation” as “an unjust or improper use of an adult’s money or property for another person’s profit or advantage, pecuniary or otherwise;”. Unfortunately, the act does not define “unjust or improper”, nor does it define “profit” or “advantage”. It is easier than one might think, to have a simple contract dispute turn into allegations of “financial exploitation” under these rules.
Unfortunately, your business can become liable for the acts of its employees and independent contractors. If an employee or independent contractor is found to have abused, neglected or financially exploited a vulnerable adult through an act related to your company, your company can have legal and financial liability attach for that act.
How to Help Protect Vulnerable Adults as a Business?
It is beyond the scope of this blog article to define all the requirements for regulated entities. If you have reason to believe your business may be regulated with respect to vulnerable adults, I strongly encourage you to seek competent legal counsel that specializes in the elderly. “Elder law” is not our primary focus, although there are good and competent attorneys in every jurisdiction that specialize in elder law.
With that said, every business should follow these guidelines if you do, or may, or have reason to believe you could, come into contract with vulnerable adults:
- Perform Regular Background Checks on Employees and Independent Contractors. Many businesses have a legal duty to conduct background checks on their employees. Furthermore, if you have employees or independent contractors who you have a reasonable belief may or will come into contact with vulnerable adults, you must perform a background check to ensure you’re not inadvertently placing predators in a position to abuse, neglect or financially exploit a vulnerable adult. Ask yourself what could happen to your business and/or a customer who happens to be a vulnerable adult, who fell victim to a rogue employee who happened to be a predator? Take reasonable precautions to ensure you don’t hire predators or rogue employees.
- Conduct Regular Onsite Visits or Checks on Your People Who May Come in Contact with Vulnerable Adults. Even though you perform background checks on your personnel, you cannot be assured you still don’t have a rogue employee on your hands, or that rogue employee has a predator for a spouse. Make sure you have the right people (or yourself) conduct audits and surprise visits to make sure your employees are there when they say they are, that they are performing the services they say they are, and that you are taking a first-hand interest in the interactions of your personnel with your customers. Any red or yellow flags (i.e. intuitions that something is amiss) should be dealt with immediately.
- Rotate Personnel, if Possible. Did you know that most banks and financial institutions force their employees to take vacations? This is because they want to see if something changes during the vacation — that is, does an account all of a sudden behave differently when the banker goes on vacation? Take this same approach to your business, and try to rotate personnel not just amongst your customers, but in their positions. This will not only help ensure you have great staff who is cross-trained in your company’s roles, but helps to break-up long-term wrongdoing and gives your personnel opportunities to sniff out trouble.
- Proper Training of Key Staff. Don’t forget that training can really help your personnel be effective and be on the look out for trouble. Make sure your staff knows the signs of a vulnerable adult, and what to do if an ordinary adult is showing signs of becoming vulnerable. Of course, if any of your personnel becomes suspicious of abuse, neglect or exploitation of a vulnerable adult, make sure your folks know how to report it.
- Create Checks and Balances. Never allow an employee performing services on or behalf of a potentially vulnerable adult also be the one entering in the bills or invoices. Never allow anyone that comes into contact with a vulnerable adult to be responsible for the amount collected, or charged to, the vulnerable adult. What processes and systems of checks-and-balances can you institute, to limit the potential harm to that vulnerable adult by a rogue employee?
- Proper Authorization and Contracts for Vulnerable Adults. Vulnerable adults cannot be held to a contract. If you suspect an adult may be vulnerable, try to identify responsible family members who can step in and advise you. Ideally, form your contract with a family member, versus the vulnerable adult. A general power of attorney is ideal, but you need to keep a copy of the POA on file and you need to read the POA to verify they have the requisite power to enter into your contract. If you have a vulnerable adult without family or a POA, you unfortunately do business with that individual at your risk. Consult with Adult Protective Services or the police, who may be able to refer you to a social worker who can assess the situation.
- Extra Precautions around Billing for Vulnerable Adults. Similarly for “Checks and Balances” above, make sure you do NOT bill for anything that doesn’t have the proper paper trail and authorization. Furthermore, institute a regular process (ideally monthly, but never greater than quarterly) where you audit your own invoices to ensure you have the right paperwork and authorizations, and they match up with the invoices and bills paid. Furthermore, if you have potentially vulnerable adults on a recurring billing system with a debit card or credit card, it pays to audit your merchant account to verify your billing system is not over-charging or over-billing vulnerable adults — which can become a high-speed pass to a “financial exploitation” charge.
- Dot Your i’s and Cross Your t’s. Do not rely on special services, billing or other options that require verbal authorizations from vulnerable adults. Make sure everything you do is properly “authorized” (see above for “Proper Authorization”), and that anything “out of the ordinary” is properly documented with a paper-trail. Also, make sure you have fully disclosed your billing and pricing policies, and that you reinforce those policies at every turn. For example, if you’re a lawn maintenance service that offers additional inspections or treatments in addition to your monthly contract, do NOT perform such additional inspections or treatments (even if requested), without proper authorization that includes the additional price for such service.
Nothing is foolproof, but by taking the proper precautions, instituting the proper policies and procedures, not only do you help protect your business against potential rogue employees or misunderstandings with vulnerable adults, you help protect those vulnerable adults too.