Grandma goes to her banker or investment advisor and asks that $ 15,000.00 from her account be used to purchase a gift card.
The financial professional suspects that Grandma is the victim of a scam, but it is Grandma’s money. Grandma insists that it be done now and she is adamant that no one should know about it.
If the banker / advisor could tell someone, maybe Grandma could avoid getting scammed, or at least prevent other scams (if a scam does work once, scammers won’t stop trying to ‘get more funds from the same victim). However, grandma’s privacy is also extremely important and the banker / advisor doesn’t want to be sued or lose their job.
Seniors are the primary victims of the $ 16.8 billion a year identity theft and cybercrime industry in the United States. or cognitive deterioration that could make them more vulnerable to financial abuse.
In 2018, Congress and the Financial Industry Regulatory Authority gave us tools to help protect seniors from financial abuse.
FINRA’s “trusted contact” rule allows investment account owners to nominate with their brokers or advisers the names and contact details of people who can be contacted if the broker / advisor believes suspicious activity is taking place. is produced. These trusted contacts do not have the authority to obtain account details, but the broker / advisor would have the authority to call these trusted contacts and notify them of suspicious activities such as unexplained withdrawals or transfers and unusual.
If you or your loved one do not yet have trust contracts attached to all investment or brokerage accounts, I suggest that you type a single letter, include your name and number (s). account and state: “In accordance with FINRA Rule 4512, I designate the following as my trusted contacts …” and provide their names, phone numbers and e-mail addresses.
FINRA’s “temporary hold” rule allows a broker to temporarily suspend disbursements from an account for up to 15 days if those disbursements appear suspicious. This rule only applies to accounts owned by investors aged 65 and over or by investors with mental or physical disabilities which, in the opinion of the broker, make it difficult for the investor to protect his or her own interests. financial. This temporary 15-day hold may be worthless unless the customer has also designated a trusted contact.
While the FINRA rules do not apply to all financial institutions, the Senior Safe Act passed by Congress applies much more broadly. This law protects employees and businesses of covered institutions (including banks, brokers, advisers, insurance agents, etc.) against breaches of liability and privacy if they alert the police or services to protect adults from potential financial abuse of people aged 65 or over. In order to achieve this immune protection, the employee must receive specialized training on how to identify and report suspected abuse of an older adult, recognize common signs of financial abuse, and manage risk considerations. declaration and disclosure taking into account the need to protect privacy. and respect the integrity of each client.
Neither the Senior Safe Act nor the FINRA rules force an employee or financial institution to do anything, and no one should expect those employees and companies to be the primary guard against exploitation. financial. However, the employees of financial institutions are our friends and neighbors and they generally want to help if they can. You can make it easier for them by providing your broker / advisor with trusted contacts for you and your loved ones, ask your banker if they have received Senior Safe Act training and you can make sure that at least one person from your bank knows you. well enough that they can recognize when something is wrong.
David Silver teaches in the finance department at East Carolina University. He is also a partner at The Graham, Nuckolls, Conner law firm in Greenville, focusing on elder law.