Legislature approves Dodd’s Elder Fraud Protection Bill

By Thomas Gase

A measure from State Senator Bill Dodd, D-Napa was approved by the California Legislature on Friday that aims to strengthen elder and dependent adult financial abuse protections.

This would be done by clarifying the duties of banks and financial institutions to safeguard against fraud.

“Today we take an important step toward underscoring what steps a bank or credit union should take to protect against senior scams, which, unfortunately, are occurring all too often,” Dodd said in a news release. “My bill says in plain language that if an institution or advisor knows or should have known that an elder or dependent adult is subject to financial abuse – and repeatedly fails to act – they may be held accountable for assisting in the abusive activity. When adopted it will serve as an up-front scam prevention policy for California banks and credit unions. I thank my fellow legislators for their support.”

Financial elder abuse cases are on the rise in California. Now, when victims attempt to sue their bank for assisting in a scam, the institution can avoid responsibility by claiming it did not have actual knowledge of fraud.

However, Dodd’s legislation, Senate Bill 278, would clarify that victims of financial elder abuse can continue to hold institutions accountable when they should have known of the fraud but negligently assisted in the transfer anyway. The clarification would support victims of financial elder abuse in meeting their burden of proof. The bill will incentivize financial institutions to implement safeguards upfront, so seniors don’t lose their life savings to scams.

SB 278 is supported by elder rights advocates and Consumer Attorneys of California. SB 278 heads next to Gov. Gavin Newsom for his signature.

“Help is on the way for millions of California seniors, who are at risk of losing their life savings in a financial scam,” said Jacquie Serna of Consumer Attorneys of California said in the same news release. “SB 278 would mark a historic shift to preventing scams before they happen, holding banks and other financial institutions accountable to take common-sense steps to help seniors recognize the signs of a scam.”

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Legislature approves Dodd’s Elder Fraud Protection Bill