Seniors will want to know about a resource that regulators published June 15, 2021, to help train financial firms to implement the Senior Safe Act. The regulators involved in the project are the Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA).
The rationale for the Senior Safe Act (which can be read in its entirety here: tinyurl.com/wcde5tax), which was signed into law in 2018 as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act, was essentially to help prevent the financial exploitation or abuse of seniors. How? By giving the financial industry a method of reporting suspected abuse to regulators. But there were strings attached. Firms had to train their employees on what to look for -- which meant articulating exactly the type of behavior that rose to reportable exploitation.
That question is answered in the training program that was just released. Called “Addressing and Reporting Financial Exploitation of Senior and Vulnerable Adult Investors” (tinyurl.com/2nhtj68s), the idea behind the program is to train employees on what to look for, how to help and how to prevent the exploitation of these at-risk investors.
The reason you need to know about the program is this: It lays out how to identify people who could be victims of financial exploitation. That’s what I’d like you to focus on, both for yourself and for those older friends and relatives whom you might be helping out with their financial affairs.
Here are the red flags cited in the program: If someone you know is displaying these behaviors, he or she could be a victim of a scammer or financial predator:
* “Uncharacteristic and repeated cash withdrawals or wire transfers.
* “Appearing with new and unknown associates, friends, or relatives.
* “Uncharacteristic nervousness or anxiety when visiting the office or conducting telephonic transactions.
* “Lacking knowledge about his, her, or their financial status.
* “Having difficulty speaking directly with the client or customer without interference by others.
* “Unexplained or unusual excitement about an unexplained or ‘too good to be true’ windfall; reluctance to discuss details.
* “Sudden changes to financial documents such as powers of attorney, account beneficiaries, wills, or trusts.
* “Large, atypical withdrawals or closing of accounts without regard to penalties.
* “Frequent password reset requests or new online account access requests.”
For additional red flags, you’ll want to read “A Guide for Developing Practices and Procedures for Protecting Senior Investors and Vulnerable Adults from Financial Exploitation” (tinyurl.com/7btcb4zx), by the NASAA.
If you would like to view the training presentation, you can access it on the FINRA website at tinyurl.com/274nr6a2.
As I mentioned in last week’s column when discussing World Elder Abuse Awareness Day, protecting older Americans from abuse is a cause that is worthy of attention. That protection is even more effective when both industries and individuals are working toward that goal.
What can you do if you suspect a friend or family member might be a victim of financial exploitation?
That depends on the circumstances and how close you are to the victim. For example, if the victim is a close relative, it would be appropriate to engage in a conversation with that relative directly to see if you can stop any further damage. If I were in that situation, I would close accounts and appoint an attorney-in-fact to act on the victim’s behalf. It’s never a one-size-fits-all solution since each situation will be different. You may not be able to identify the perpetrator, who in the worst cases could be an employee, a banker or financial adviser, or even a friend or family member.
If the situation is dire, with fraud already committed, the Justice Department’s National Elder Fraud Helpline (1-833-372-8311) can help. The hotline has resources for reporting the situation. Also, each state has a version of adult protective services, providing more resources for reporting potential scams. A national listing can be found at the nonprofit National Adult Protective Services Association (tinyurl.com/225zmzra).
Red flags call for action. This is not the time to ignore the situation.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (firstname.lastname@example.org). Please visit www.juliejason.com.
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