Headway is being made on the state level in fighting elder fraud and financial abuse, according to Joseph Borg, president of the North American Securities Administrators Association, which represents state securities offices in the United States, Canada and Puerto Rico.
Fourteen states have adopted laws that require or urge financial advisors to report any suspected financial abuse of clients over the age of 65 to the proper state elder protection agencies. Most laws are mandatory; some are voluntary, said Borg, who is also the director of the Alabama Securities Commission.
This comes at the same time the federal Senior Safe Act has passed Congress and is awaiting the president’s signature. The act encourages advisors and their firms to report the financial exploitation of senior citizen clients by protecting advisors from liability and the violation of privacy laws.
The association’s model act says that any qualified individual who reasonably believes financial exploitation of an elderly person is being carried out has to report it to Adult Protective Services and the state securities regulator. Additional states are considering this or similar legislation, Borg said.
“In Alabama, we have passed legislation to increase the statute of limitations to five years from the date of discovery instead of five years from the occurrence,” Borg said. “We have also issued guidelines on what red flags to look for.”
Estimates of the cost of elder financial abuse range from $3 billion a year to $36 billion and even those figures don’t take the social costs into account, said Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia, who spoke at an elder justice conference earlier this year.