Most of these crimes are perpetrated by someone the older person knows and trusts like family, neighbors and caregivers. One in five people over the age of 65 have been the victim of financial fraud and it is estimated that senior financial abuse is now over $36.5 billion last year alone!
So what is Florida doing about it? On July 1, Gov. Ron DeSantis signed into law a new bill (statute 517.34) that is designed to protect vulnerable senior investors from financial exploitation. The new “Vulnerable Investor” statute permits an entirely new group of professionals to not only take action and report suspected financial abuse of a senior, but provides the ability for them to “freeze” a transaction.
This group includes investment advisers and security dealers who, up to now, had no recourse if they suspected abuse of an elderly client. Privacy issues, laws and liability issues prevented them from acting in the past, even if they suspected exploitation was happening. Now they are mandated to report suspected abuse but will be immune from civil liability if acting in good faith.
If an investment adviser “reasonably believes that financial exploitation has occurred, is occurring, has been attempted, or will be attempted in connection with a disbursement or transaction,” this adviser can now, with this new law, delay or “freeze,” any transaction for up to 15 business days after the date they received a request. The new law also allows them to notify a “trusted contact” of the problematic transaction— i.e., sending money to a scammer overseas.
The person initiating the delay is then required within three days to notify in writing “all persons authorized to transact business on the account and any trusted contacts on the account,” unless the person to be contacted is the person engaged in the suspected exploitation. They must then notify the Florida Office of Financial Regulation of the delay and all related records must be made available.
Before you cry foul, understand that this statute clearly defines who this applies to. Called “Protection of Specified Adults,” the definition of a vulnerable adult was expanded and defined as 65 or older, with an impaired ability to perform activities of daily living or to provide for his or her own care or protection due to a “mental, emotional, sensory long-term physical or developmental disability or dysfunction, or brain damage or the infirmities of aging.”
I do wish they had come up with a phrase more politically correct than “infirmities of aging,” but let’s not get picky. According to Alex J. Sabo, a South Florida attorney specializing in vulnerable seniors who was very involved in the writing and passage of this bill, “the new legislation contains a strong statement of legislative intent, recognizing the freedom of individuals covered by the statute to manage assets, make investment decisions, and spend their funds as they see fit, but at the same time providing for their protection.”
To put this bill in context, Florida passed a groundbreaking bill in 2014 that establishing a much broader definition of exploitation against seniors that included persons “in a position of trust and confidence with the elderly person.” It allowed (finally) for both criminal and civil charges to be brought against people who steal from joint accounts or who use their status as an agent under power of attorney to pay their own bills or make gifts to themselves.
In July 2018, Florida passed another statute that allowed for immediate injunctions and if warranted, investigations of those exploiting vulnerable adults, another effective tool to foil perpetrators.
With this new bill, financial advisers can now take actions to prevent someone with cognitive impairment, for example, from being taken advantage of. No longer do they need to watch their clients lose everything to a scammer or exploiter and be powerless to stop it.
Kudos to the Florida Securities Dealers Association, Financial Services Institute, the Securities Industry and Financial Markets Association (SIMFA), and Gainesville’s own North Central Florida Senior Advocacy Network, of which I am a member. All of these groups worked with the Florida Office of Financial Regulations and the Elder Section of The Florida Bar.
Finally, good news in these troubled times. This proves that diverse political groups and organizations can come together and pass legislation for the real benefit of our elders. Our Florida seniors will be safer for it!
Star Bradbury is the owner of Senior Living Strategies in Gainesville.
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Star Bradbury: New law protects seniors from financial exploitation
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