Friday, March 17, 2023

Ken Morris: It’s time to end financial exploitation against the elderly

By Ken Morris

No matter your wealth, you can’t buy time. That’s why it’s so important to make the most of it.

Fortunately, many seniors have excelled at managing their time and have been fortunate to have both good health and decent wealth. In Washington, the House recently passed the Financial Exploitation Prevention Act of 2023. The bill is currently in the hands of the Senate. Back in 2021, the House passed a similar bill, but for whatever reason, it never made it through the Senate. Hopefully, it will pass this time.

Unfortunately, some criminal elements are trying to get access to our private financial data almost every day. Their goal, simply to pry our hard earned money away from us.

We have to stay wary and diligent throughout our lives to prevent that from happening. However, the older we get, the more vulnerable we tend to become. Seniors deserve extra protection and I believe the bill is warranted and should become law this time around.

According to a 2020 study by the AARP Public Policy Institute, the average loss per incident against a senior is $120,000. It ‘s estimated that the cumulative yearly loss for seniors is a staggering $3 billion. In Michigan alone, there are an estimated 35,000 cases of financial abuse per year.

When it comes to handling client funds, there’s an overabundance of rules in the financial services industry. For example, if a client emailed me requesting money from their investments, I’m required to speak with them prior to executing the transaction. A few years back, after receiving such an email, I called my client to verify. As it turned out, my client’s email was hacked and there was no such request for funds.

There was a subsequent investigation by the local police who notified my client of the scam. When financial services industry mandates are properly received and promptly executed, alert financial advisors can provide an extra layer of protection.

One of the reasons I favor the proposed bill is that better phrase it provides a “timeout” for senior transactions. The bill that recently passed the House would allow investment firms, annuity companies and advisors to postpone redemption requests for up to twenty-five days if there were any suspicion of financial abuse or exploitation.

I don’t view this as an ultimate solution, but it’s certainly a step in the right direction. To be honest, there have been times when I thought family members were taking advantage of a good-hearted elderly parent. But at the end of the day, it is the client’s money. That’s a family matter 

However I was also involved when a supposed Good Samaritan neighbor wasn’t so well intentioned. Fortunately my organization contacted their out-of-town adult children and prevented any wrongdoing.

As people become older and older, the likelihood of them being taken advantage of increases. I believe that any steps that help protect seniors are steps in the right direction. Regardless of age, we need to guard against financial scams and crimes. Let’s help protect vulnerable seniors from the unscrupulous.

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Ken Morris: It’s time to end financial exploitation against the elderly

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