Procedures Established to Protect Elderly from Financial Exploitation

Last week, Governor Ned Lamont announced that he has signed into law legislation implementing procedures that protect seniors from suspected cases of financial fraud, scams, and exploitation by a person taking care of an older adult.

Under Public Act 23-161, financial institutions can, beginning July 1, 2024, temporarily suspend or hold transactions involving an account of an adult over the age of 60 if there is a reasonable suspicion of financial exploitation, which is defined as taking advantage of an eligible adult by another person or caretaker for monetary, personal, or other benefit, gain, or profit. When it occurs, financial institutions must disclose the suspected abuse to the Connecticut Department of Banking or Department of Social Services, which will investigate the report and refer it to law enforcement authorities if appropriate.

Also, the new law allows a broker-dealer or investment adviser to place a temporary hold on a disbursement of funds or securities or a transaction in securities from an eligible adult’s account, including an account with an eligible adult as a beneficiary, if the broker-dealer or investment adviser reasonably believes that financial exploitation has occurred, is occurring, has been attempted, or will be attempted.

According to AARP Connecticut, older people comprise 30 percent of the victims of consumer fraud crime while constituting only 12 percent of the population. “Women, who make up an increasingly larger percentage of the older population by virtue of a longer life expectancy, are most of the victims,” the organization said in testimony in support of the bill.

The Banking Department, in testimony supporting the bill, cited several statistics of elder fraud, including:

• Over 8.68 million incidents of elder fraud occur every year in total nationwide, with total losses of $113.7 billion a year and an average loss per case of $20,015.
• Deposit accounts are the most common product involved with elder fraud cases (60%), followed by debit cards (24%) and credit cards (7%).
• In Connecticut, financial exploitation occurs at an estimated rate of 8,212 per 100,000 seniors.
• In 2020, there were 3,094 cases of elder financial crimes in the state, with a total financial loss of $38.6 million.
• When adjusted for unreported estimates in Connecticut, the total number of cases is a staggering 72,000, with estimated total costs of $907 million.