Elder fraud costs $3 billion yearly. Bill in Congress helps prevent it

A invoice that is pending in the Senate goals to battle a persistent hazard to older adults and different weak people: monetary exploitation.

In a nutshell, the measure would permit so-called registered open-ended funding corporations — which might embody mutual funds, exchange-traded funds, hedge funds, some annuities and different pooled investments — or their brokers to postpone a requested redemption of a safety or fund for as much as 25 days if it’s believed to be carried out to use the investor.

The invoice, which might apply to people who find themselves at the very least age 65 or are youthful however have impairments, additionally authorizes state regulators, courts or administrative businesses to delay cost additional.

“Bad actors are always finding new ways to exploit existing law,” mentioned John Jennings, assistant director of presidency affairs on the Insured Retirement Institute.

The invoice would “provide folks on the front line with the tools necessary to help prevent exploitation,” Jennings mentioned.

Called the Financial Exploitation Prevention Act of 2023 and sponsored by Rep. Ann Wagner, R-Mo., the invoice cleared the House final month in a unanimous bipartisan vote. It now awaits consideration by the Senate Banking Committee, though it’s unsure whether or not or when the invoice could be taken up.

A virtually equivalent model of the invoice that cleared the House in 2021 ended up languishing in the Senate.

Among older adults, the yearly value of monetary fraud is estimated to be about $3 billion, though the quantity is predicated on reported occasions, and never all occurrences are formally documented. The common loss per incident is an estimated $120,000, in line with a 2020 examine from the AARP Public Policy Institute.

Family members steal twice as a lot cash as strangers, in line with the examine. Older adults with cognitive challenges are probably the most weak to exploitation and should have as much as twice as a lot stolen than these with out these points.

“The financial industry is catching up and catching on that there are a lot of people out there who are vulnerable to financial exploitation in general,” mentioned Marve Ann Alaimo, a accomplice on the regulation agency of Porter Wright Morris & Arthur.

“The aging population … is ripe for it, particularly at a time when a lot of transactions are done online or by phone,” Alaimo mentioned.