The estimated five million elderly Americans who fall victim to financial scams every year have some added protections from the federal government thanks to the Senior Safe Act, which was signed into law by President Donald Trump in late May 2018.
The federal legislation is modeled after elder abuse protection laws in Maine. It’s designed to protect the country’s most vulnerable citizens, many of whom have to turn to Medicaid and government assistance after they have been scammed.
Examples of scamming the elderly include fake telemarketing schemes that threaten to arrest an elderly person if he does not withdraw money from his bank account and send payment, as well as when financial planners involve their clients in risky investments that are not in their best interests.
Fraudulent financial planners seek to benefit off the high commissions they receive by engaging in excessive trades or through other high-cost investments.
U.S. Sen. Susan Collins, who helped to pass the legislation, said financial abuse costs elderly residents upwards of $3 billion every year. Elderly people are often targeted because they tend to have more money sitting idly in their bank accounts, and their cognitive abilities may not be as sharp as they used to be. Sometimes, they’re more vulnerable because they are isolated, physically disabled, suffering from other health problems, or grieving the loss of a loved one.
In short, senior citizens may simply not have the ability to pay close attention to their investments, which opens the door to predators.
What does the Senior Safe Act do for elderly citizens?
The Senior Safe Act encourages employees at financial institutions to report suspected elder financial abuse in the following ways:
- It provides immunity to credit union depository institutions, investment advisors, broker/dealers, insurance companies and agencies, and transfer agents who report suspected elder abuse, but only if the company implements a training program to train workers on how to spot elderly financial abuse.
- Before the federal law was enacted, financial agents and institutions argued that they could be held liable for releasing the private financial information of clients without their express permission. The new law seeks to remedy this issue.
What are states doing to protect their elderly residents?
The Senior Safe Act, in many ways, is Congress playing catch-up to the 25 states, plus Washington, D.C., that already have enacted similar legislation to protect elderly residents from financial abuse.
According to the Consumer Financial Protection Bureau, these 25 states, plus DC, either encourage or require banks and other financial institutions to report suspected financial scams against the elderly to regulators. The Senior Safe Act is not a mandate for financial institutions, but it does strip away the excuse that they cannot report suspected illegal activity because of privacy laws.
According to a study from WalletHub, here are the states with the best and worst elder abuse protection laws:
- Nevada has the strongest elder abuse protection laws in the country.
- California ranks last in the strength of its laws.
- Louisiana ranks No. 12 out of 51 for its elder abuse protection laws.
- The study ranks states based on three key areas: prevalence of financial abuse against elderly residents, resources for elderly residents, and protection provided for them.
Don’t let scammers or family members take away your life savings. Studies show that elderly citizens who consult with third-party financial advisors are far less likely to be scammed out of their hard-earned money. Contact the office of Fishman Investment Fraud Lawyers today for help.