Roughly 10,000 baby boomers will turn 65 each day for the next 12 years. With such numbers, it should be no surprise that financial exploitation costs “seniors”—generally defined as those who are 65 and older—at least $2.9 billion annually. In an effort “to showcase the urgency of preventing senior financial exploitation,” the North American Securities Administrators Association (NASAA), an association of state securities regulators, recently polled regulators from all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico and published the results in a survey titled “Seniors and Financial Exploitation.”
Of the 36 regulators who responded, the survey found concerns that the rate of financial exploitation among seniors is increasing (29 percent indicated that financial exploitation is increasing, compared with only 3 percent who saw a decrease). Although virtually all of the regulators believed that there is now a greater awareness of senior financial exploitation, the survey found that the vast majority of cases of senior financial fraud “go undetected until too late.” Finally, 75 percent of the regulators who responded believe that broker-dealers and investment advisors are not doing enough to prevent senior fraud.
The federal government has taken some steps to allay these concerns. The Consumer Financial Protection Bureau (CFPB) has published a number of resources available to seniors and their families in an effort to protect against fraud and financial exploitation, including information available at their website. Of course, federal law also criminalizes certain deceptive and fraudulent practices often used to exploit seniors. Recently, the Senate passed the Elder Abuse Prevention and Prosecution Act. It is designed to prevent elder abuse and exploitation and improve the justice system’s response to victims in elder abuse and exploitation cases. The Senate also passed the Seniors Fraud Prevention Act of 2017, which requires the Federal Trade Commission (FTC) “to establish an office within the Bureau of Consumer Protection to advise the FTC on the prevention of fraud targeting seniors and to assist the FTC in monitoring the market for mail, television, Internet, telemarketing and recorded message telephone call (robocall) fraud targeting seniors.” In addition, and as discussed below, the Financial Industry Regulatory Authority, an independent, non-governmental regulator for U.S. securities firms, recently adopted a new rule providing some protections for seniors, though those changes do not go into effect until 2018.