As elder abuse cases become more prevalent in the financial community, more measures are being put in place to protect potential victims. State securities regulators are working on measures so states can better protect senior citizens from financial exploitation.
Washington, Delaware, and Missouri have all begun enacting laws that specifically defend against elder abuse.
With these new laws, brokers are allowed to notify state and local authorities if they suspect that their client is being scammed. This also allows financial professionals to suspend transactions of their clients’ accounts for a set period of time. Brokers are also protected from liability if they do report the abuse.
More states are beginning to consider similar rulings and the North American Securities Administrators Association is attempting to provide guidance.
Financial abuse of the elderly can include family members, friends, caretakers, dishonest financial advisors and many other people that target the elderly. The North American Securities Administrators Association reports that 34% of the enforcement actions that its members have taken since 2008 have involved elderly victims. It is widely believed that most cases of elder abuse go unreported.
The issues with protecting seniors, is that privacy laws are involved. Because of this lawmakers must decide if a broker can contact a family member, or, because a family member is not a governmental party, does contacting them breach the client’s privacy.
Teaching elderly clients and the financial professionals that manage the retirement savings of the elderly what red flags to watch for can help them to navigate potential scams.