Lawmakers from both sides of the aisle are trying to build momentum behind the Senior Safe Act, which also has the backing of organizations such as the Investment Adviser Association, SIFMA and the Insured Retirement Institute — trade groups that are not always aligned on other public policy issues.
What unites them in this case is a common challenge. Their member firms all work with senior clients who might be targeted by financial scammers. Regardless of a firm's business model, determining how to respond when an elderly client might be the victim of abuse is a tricky question. Too often, senior advocates say, those incidents go unreported.
The chairwoman of the Senate Aging Committee, Sen. Susan Collins (R-Maine), is sponsoring the Senior Safe Act.
The chair of the Senate Aging Committee, Sen. Susan Collins (R-Maine), is sponsoring the act which she reintroduced last month and is hoping to advance. The legislation cleared the House last year, but stalled in the Senate.
MOST-EGREGIOUS SCAMS
Collins released a report detailing the types of scams that are most commonly reported to the Aging Committee's fraud hotline (855-303-9470). Topping that list is the so-called IRS scam, where the scammer impersonates a federal agent and informs the victim that they owe back taxes, often threatening them with an imminent arrest if they don't immediately come up with the money, and sometimes coming back for more.
"The criminals who prey on our seniors are relentless," Collins says. "They will harass seniors over and over again until they have drained every penny."
The fifth-ranked scam on the committee's list will sound familiar to many advisers — elder financial abuse, defined as the "illegal or improper use of an older adult's funds, property or assets."
Often the perpetrators are close to the victim and occupy a position of trust, such as caregivers, neighbors or even family members. Like other forms of exploitation, that kind of abuse often goes unreported, making reliable numbers on the scope of the problem difficult to obtain. The GAO has pegged the annual costs of elder financial abuse and fraud at $2.9 billion a year, while other estimates have put the figure far higher.
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SAFE HARBOR FROM LAWSUITS
The Senior Safe Act would seek to address the shortfall in reporting abuse by giving financial companies and their employees a safe harbor from civil lawsuits if they reported suspected abuse to the appropriate regulatory, law-enforcement or adult protective services. To invoke that liability shield, firms would have to administer training to their employees on spotting signs of elder abuse.
Supporters say that Collins' bill would provide a much-needed explicit statutory cover to protect financial firms reporting elder abuse.
A consortium of regulators, including the SEC and FTC, has sought to clarify an exemption for reporting elder abuse under existing privacy law. In 2013, that group issued guidance stating that "reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not, in general, violate the privacy provisions of the [Gramm-Leach-Bliley Act] or its implementing regulations."
But many firms have still been reluctant to establish policies and training programs to spot and report elder abuse, according to Menio.
"We need to do something to make them feel better," she says. "We keep pulling out the Gramm-Leach-Bliley Act and saying you can do this — you're covered. But they still are not doing it."
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Is help on the way for advisers fighting elder abuse?
