Financial exploitation of the elderly is a significant problem in the United States today. Recognizing this problem in 2016, the North American Securities Administrators Association (NASAA) passed a model act entitled “An Act to Protect Vulnerable Adults From Financial Exploitation” which in varying forms was enacted into law by four states in 2016 and more in 2017 with Texas becoming the latest state to pass such a law. The Texas version of the law became effective today.
The law requires various financial professionals such as brokers and in some instances, bankers to report suspicions of elder financial exploitation coupled with the authority to temporarily delay disbursements of funds while the suspicions are investigated. The states passing these laws are taking important steps to protect their elderly citizens from becoming victims of scams, such as mystery shopper scams and phony lottery scams.
Seniors have long been a favorite target of scammers both because they have money and are often more trusting of scammers which makes them more vulnerable. In fact, recent studies have shown there is a part of our brain that controls skepticism that becomes less viable as we age thereby making the elderly more susceptible to scams.
If your state is not one of the states that has passed or is considering this model legislation, I urge you to contact your state legislators to pass this law.