Congress Is Getting Serious About Preventing Elder Fraud

Fraudsters could soon face tougher consequences for elder financial abuse.

Older Americans lose as much as $37 billion each year to financial fraud, but new legislation in the congressional pipeline would impose tougher penalties for these crimes in an effort to combat the rising rate of exploitation.

Senators Chuck Grassley (R-Iowa) and Richard Blumenthal (D-Conn.) announced in a hearing Wednesday that they are developing federal legislation that will introduce tougher penalties for scammers who target older consumers. The bill will also promote interagency coordination around elder abuse cases—including the improvement of investigation and prosecution—and enhancement of survivor assistance and data collection.

“We need to make sure that government at all levels is working to spread the word on financial exploitation, that individuals on the front lines receive proper training, and that those in the position to combat these crimes have the necessary tools and authority to do so,” Grassley said Wednesday. He added that he hopes to unveil the bill “soon.”

Fraud schemes targeting older Americans are estimated to rise, especially because the number of people over 65 is expected to more than double from 46 million now to 98 million by 2060, according to the 2016 Population Reference Bureau report. And while the total damage incurred through these schemes is in dispute, the emotional and financial turmoil of victims is very real. A 2015 report from True Link estimated seniors lose $36.5 billion each year to fraud and financial abuse. A similar 2015 report by the AARP found financial exploitation robs older Americans of $3 billion annually.

Older Americans may not be defrauded at higher rates than younger consumers, but certain types of scams are more likely to impact them, says Lois Greisman, who heads the Division of Marketing Practices for the Federal Trade Commission’s Bureau of Consumer Protection. The most common of these scams are around lotteries and prize promotions, as well as fraudsters posing as technical support to “fix” non-existent computer problems.

Early detection is the key to combat these schemes, Connecticut State Ombudsman Nancy Shaffer said in Wednesday’s hearing. “Giving law enforcement more tools, more preliminary kinds of assistance in how to identify it as it’s happening, is an important piece,” Shaffer said.

This is not the first time lawmakers have attempted to pass legislation that would address elder fraud.  Senator Amy Klobuchar (D-Minn.) introduced the Seniors Fraud Prevention Act last June. It aims to set up an advisory office within the Bureau of Consumer Protection of the Federal Trade Commission specifically to combat elder fraud. Another measure, the Senior$afe Act of 2015 introduced by Sen. Susan Collins (R-Maine) last October, would help financial professionals, including financial advisers, report elder financial fraud. But legislation tracking site Govtrack.com estimates Klobuchar’s bill has a 44% chance of being enacted, while Collins’ bill rated only a 7% chance.

“All too often the quiet, invisible, heartbreak of financial elder abuse fails to make the headlines, but it happens every day and it’s a scourge that needs to fought and conquered,” Blumenthal said Wednesday.

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Congress Is Getting Serious About Preventing Elder Fraud

Senate passes Valesky-sponsored elder financial abuse legislation

David J. Valesky

Legislation sponsored by Senator David J. Valesky (D-Oneida) protecting seniors from financial abuse passed the Senate on March 22. The bill would authorize banks to refuse any transaction of moneys if a banking institution, social services official, or law enforcement agency reasonably believes that financial exploitation of a vulnerable adult is occurring.

Persons over the age of 65 are the fastest growing segment of the American population. While senior citizens constituted only 4% of the total population in 1900, by 1994 the proportion of seniors in the united States had grown to 12.5%. By 2050 almost 25% of all Americans will be over age 65.

Evidence suggests that there may be a surprisingly high percentage of senior citizens who are, either intentionally or unintentionally, mistreated by family members or institutional caregivers or who, of their own volition, are neglecting their own basic custodial needs. This maltreatment can take many forms, ranging from physical and psychological abuse to neglect to financial abuse and exploitation.
The loss of one’s financial assets can have a severe long-term impact on a senior’s well-being and quality of life. Data obtained by the New York State Office of Children and Family Services project a surge in the number of cases of financial abuse by the year 2030, with nearly 200,000 incidents predicted to occur.

In order to combat these rising trends and to protect even more elderly individuals from becoming future victims themselves, Sen. Valesky proposed legislation that would authorize banks to refuse suspicious transactions.

“We are seeing increasing incidences of elder abuse, and we must do all we can to stop this disturbing trend,” Sen. Valesky said. “This bill will establish a new protection for our elderly citizens and give law enforcement officials an additional tool to pursue and prosecute those who would take advantage of and harm adults who are unable to protect themselves.”

Financial elder abuse manifests itself in many ways. Often, the perpetrators are family members of or have a close relationship with the victim, who may depend on them for care, depressing the number of reported cases. If you or anyone you suspect may be a victim of abuse, contact the authorities or call Vera House’s 24-hour crisis hotline at315-468-3260.

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Senate passes Valesky-sponsored elder financial abuse legislation

U.S. state regulators unveil plan to protect seniors from scams

SAN JUAN, Puerto Rico (Reuters) - A proposal unveiled by U.S. state securities regulators on Tuesday could lead to more uniform state laws aimed at protecting seniors, people with dementia and other vulnerable adults from financial exploitation.

The plan by the North American Securities Administrators Association (NASAA), would establish a model law whose provisions would include allowing firms to temporarily hold off on disbursing funds or securities when they suspect potential financial abuse.

NASAA, a group of securities regulators from U.S. states, Canada and Mexico, expects to have a final version in place by year-end, said Judith Shaw, who became NASAA's president on Tuesday. Shaw, who is also Securities Administrator at Maine's Department of Professional and Financial Regulation, unveiled the plan at the group's annual meeting.

The group is requesting input from the public and financial advisory industry about the proposal through Oct. 29.

The plan follows efforts by some U.S. states that have already adopted or are considering similar measures. On June 12, Missouri became the third state to enact a law to protect senior citizens from scams and other types of financial exploitation.  Washington and Delaware also have similar laws.

More than five million Americans over the age of 65, or 1.5 percent of the U.S. population, have Alzheimer's disease, the most common form of dementia, according to the Chicago-based Alzheimer's Association. That could balloon to 7.1 million by 2025.

These people can become easy targets for scams. U.S. seniors lose as much as $2.6 billion per year to financial exploitation, according to the Securities Industry and Financial Markets Association, a trade group.

A model law, which state legislators could choose to adopt, would lead to more uniformity, Shaw said in an interview.

Brokerages and investment advisory firms could then expect consistency when developing their procedures and programming software, Shaw said.

"They know they can follow the same process and procedures state by state in order to protect seniors," Shaw said.

The NASAA plan would allow firms to report suspected abuse to adult protective services and securities regulators without fear of legal actions, such as lawsuits, for violating privacy, among other things, Shaw said.

Firms would also have to make reasonable efforts to get the name and contact details for a trusted contact person when opening a customers' account.

The NASAA effort, in the works for about a year, is similar to a Sept. 17 proposal announced by the Financial Industry Regulatory Authority, Wall Street’s industry funded watchdog.

(Reporting by Suzanne Barlyn; Editing by Frances Kerry)

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U.S. state regulators unveil plan to protect seniors from scams

Senate Passes Elder Financial Abuse Legislation

David J. Valesky

(Albany, NY – June 2015) Legislation sponsored by state Senator David J. Valesky (D-Oneida) protecting seniors from financial abuse passed the Senate June 15, which was also World Elder Abuse Awareness Day.

People over the age of 65 are the fastest growing segment of the American population. While senior citizens constituted only 4 percent of the total population in 1900, by 1994 the proportion of seniors in the United States had grown to 12.5 percent.

By 2050 almost 25 percent of all Americans will be over age 65. Evidence suggests that there may be a surprisingly high percentage of senior citizens who are, either intentionally or unintentionally, mistreated by family members or institutional caregivers or who, of their own volition, are neglecting their own basic custodial needs. This maltreatment can take many forms, ranging from physical and psychological abuse to neglect to financial abuse and exploitation. The loss of one’s financial assets can have a severe long-term impact on a senior’s well-being and quality of life. Data obtained by the New York State Office of Children and Family Services project a surge in the number of cases of financial abuse by the year 2030, with nearly 200,000 incidents predicted to occur.

In order to combat these rising trends and to protect even more elderly individuals from becoming future victims themselves, Valesky proposed legislation that will, among other things: authorize banks to refuse suspicious transactions; expand the definition of “caregiver;” and allow a prosecutor to obtain medical records under certain circumstances.

“We are seeing increasing incidences of elder abuse, and we must do all we can to stop this disturbing trend,” Valesky said. “These bills will establish new protections for our elderly citizens and give law enforcement officials additional tools to pursue and prosecute those who would take advantage of and harm adults who are unable to protect themselves.”

“Vera House is so grateful for the work Senator Valesky is doing to advance legislation to protect vulnerable adults. Elder abuse, neglect and financial exploitation are growing problems, and are best addressed with community collaboration. The proposed legislation makes it easier for financial institutions, social service agencies, law enforcement and prosecutors to pursue these cases, reduce financial losses and protect seniors in our community,” said Randi Bregman, Executive Director, Vera House.

The bills include:
S.639, which authorizes banks to refuse any transaction of moneys if the banking institution, social services official, or law enforcement agency reasonably believes that financial exploitation of a vulnerable adult has occurred or may occur.

S.641, which expands the definition of “caregiver” under the penal law to include a person who voluntarily, or otherwise by operation of law (such as an appointed guardian or power of attorney), assumes responsibility of an elderly person so that they would be tried under the “endangering the welfare of a vulnerable elderly person” law.

S.624, which proposes to allow a prosecutor to obtain medical records, without a privilege waiver, with a subpoena, endorsed by the court, based upon a showing that the patient suffers from a mental disability, and that the patient has been a victim of a crime.

Financial elder abuse manifests itself in many ways. Often, the perpetrators are family members of or have a close relationship with the victim, who may depend on them for care, depressing the number of reported cases. If you or anyone you suspect may be a victim of abuse, you should contact the authorities, or call Vera House’s 24-hour crisis hotline at 315-468-3260.

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Senate Passes Elder Financial Abuse Legislation