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President Trump signs Senior Safe Act to protect against financial abuse, exploitation

Chalk up another win on the policy front for senior investors, thanks to a new set of protections signed into law last month.

On May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act, a bipartisan overhaul of financial regulation. Included in that legislative package was the Senior Safe Act, which strengthens consumer protections by making it easier for financial advisors, brokers and firms to report suspected incidents of senior financial exploitation to authorities.

The rationale for the Senior Safe Act began with the recognition that a financial adviser or broker-dealer may be the first to spot potential signs of financial abuse, exploitation, or fraud in a client’s portfolio. One industry study estimates, based on media reports, that U.S. seniors suffer losses of nearly $3 billion each year due to financial exploitation and abuse—and the real total is most likely significantly higher, since many victims decline to report their losses out of embarrassment or fear of losing their independence.

Financial professionals may be the first to notice suspicious patterns of unusual activity on a client’s account, like atypical withdrawals or a sudden interest in risky assets that don’t track with the client’s previous investing practices. However, some advisors may hesitate to take action, out of concern about being held liable in court for what could be viewed as a violation of a client’s privacy.

The Senior Safe Act explicitly shields financial firms and advisors from hostile actions if they report instances of suspected exploitation to law enforcement, adult protective services agencies or the appropriate regulator. In exchange, firms are required to provide their employees with training on spotting the red flags that suggest financial abuse and fraud.

The Senior Safe Act was sponsored in the Senate by Senators Susan Collins (R-Maine) and Claire McCaskill (D-Mo.), and supported by a diverse set of financial industry groups, including the Securities Industry and Financial Markets Association (SIFMA), the Financial Services Institute, the Investment Adviser Association and others. The House version was sponsored by Rep. Bruce Poliquin (R-Maine) and Rep. Kyrsten Sinema (D-Ariz.). This act is a positive step forward for senior investors, with much more work to come.

The Senior Safe Act is the second round of enhanced federal protections for seniors enacted into law in recent months. Last fall, Congress passed and the president signed the Elder Abuse Prevention and Prosecution Act. That bipartisan law protects vulnerable seniors by, among other things, strengthening law enforcement’s ability to investigate and bring charges in elder fraud cases. It also requires the Department of Justice to designate an Elder Justice Coordinator in each federal district and amends the federal criminal code definition of telemarketing fraud to include email marketing fraud. (The full text of the law is available here.) Meanwhile, industry leaders are also pushing to advance stronger protections for seniors at the state level.

Recent years have brought welcome attention to the threat of senior financial exploitation, and policymakers have responded with foresight and effectiveness. But remember that the most important front line in protecting against financial abuse and exploitation starts at home and in our own communities. Being aware of the signs of abuse and exploitation—and knowing how and when to take action to help victims—is the best prevention. Check out the resources below for more information on how you can protect yourself and your loved ones from becoming victims.

Other helpful resources: 

Previously on Project Invested:        

How the financial industry is stepping up to protect senior investors in 2018

How to prevent senior financial abuse                                 

Get the facts about senior financial abuse                                   

How to talk to your parents about money

Elder Fraud bill signed into law, heightening senior protections 

SIFMA

Senior Investor Protection Toolkit

National Adult Protective Services Association

What is financial exploitation?

National Center on Elder Abuse

Red flags of abuse 

National Council for Aging Care

Recognizing elder abuse

 

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