By: Kent S. Berk, Attorney | Shareholder, Berk Law Group, P.C.

January 07, 2016 10:09 am EST
vulnerable adults

Financial exploitation of vulnerable elderly adults is a serious problem.  Many seniors suffer from dementia or Alzheimer’s disease, which limits their ability to protect themselves from abuse, neglect or financial exploitation.  It makes them easy targets for unscrupulous caregivers, family members, friends or strangers.

Elder abuse costs about $3 billion dollars a year, according to Mary Mack, the president of Wells Fargo Bank’s brokerage division.  Combating exploitation requires new methods of protection.  What more can be done to help protect the financial security of our beloved vulnerable senior citizens?  Fortunately, there are some new ways.

Senior Savings Protection Act

One new way to protect seniors involves giving stock brokers and financial advisors authority to report suspicious activity or even stall transactions that may be tainted by exploitation.  Joining Delaware and Washington, Missouri has become the third state to pass a law that can help protect the elderly from financial exploitation.  Missouri’s new law is titled the “Senior Savings Protection Act.”

The Missouri Senior Savings Protection Act took effect on August 28, 2015.  The new law allows brokerage firms to place questionable transactions on hold for up to ten days with no repercussions.  Questionable transactions are those involving an individual aged 60 or above, or a younger person with disabilities, where a broker suspects that exploitation may be involved.  Requests for large sums of money, unusual trades and withdrawals are signs of misconduct, especially if the broker has noticed the client exhibiting signs of dementia.

Before these laws, securities firms would be violating strict rules about executing trades and withdrawals within a timely manner.  Under this new Act, a broker-dealer, agent, or qualified individual who, in good faith and exercising reasonable care, complies with the Act shall be immune from any civil liability.  Where Missouri differs from other states is that qualified individuals, such as a broker’s supervisor, or a compliance or legal officer, are also given the ability to contact the family members of the individual they suspect is being exploited.

So, what are the specific requirements of the Missouri law?  First, it is important to understand the key definitions:

  • “Financial exploitation” is “the wrongful or unauthorized taking, withholding, appropriation, or use of money, real property, or personal property of a qualified adult.”
  • A “qualified individual” is “a person associated with a broker-dealer who serves in a supervisory, compliance, or legal capacity as part of his or her job.”
  • A “qualified adult” is “a person sixty years of age or older, or a person who has a disability and is between the ages of eighteen and fifty-nine.
  • An “immediate family member” is “a spouse, child, parent, or sibling of a qualified adult.”

Missouri’s Senior Savings Protection Act, section 409.610, provides:

If a qualified individual reasonably believes that financial exploitation of a qualified adult has occurred, has been attempted, or is being attempted, the qualified individual may notify the agencies.  Subsequent to notifying the agencies, an agent or qualified individual may notify an immediate family member, legal guardian, conservator, co-trustee, successor trustee, or agent under a power of attorney of the qualified adult of such belief.

Most importantly, the Senior Savings Protection Act allows a qualified individual to refuse disbursements from an account belonging to a qualified adult if they reasonably believe that the disbursement involves financial exploitation.  The broker-dealer or qualified individual must make a reasonable effort, within two business days, to notify parties that are authorized to transact business on the account, unless the parties are believed to be involved in the suspected financial exploitation.  Within three business days, the broker-dealer or qualified individual should report the suspected financial exploitation to the department of health and senior services and commissioner of securities.

A broker-dealer may also provide access to records to law enforcement or the department of health and senior services and commissioner of securities that are relevant to the suspected financial exploitation.

Although it may take several years for other states to consider these new laws, Delaware, Washington and Missouri have taken a great step towards protecting vulnerable adults from misappropriation of funds and financial exploitation.  Because exploitation is often committed by those who are charged with the care of the vulnerable senior citizen, misconduct is often undetected until it is too late.  And, it can be difficult to recover assets after they have been misappropriated.  However, as more states adopt these and other new laws, more brokers will be able to prevent elder exploitation before it occurs.  No longer facing the fear of violating strict rules, brokers in the three states that implemented these new laws can protect customers from falling victim to an abusive caretaker or con artist.

Seniors Real Estate Specialist

Real estate agents are doing their part by offering a Seniors Real Estate Specialist (SRES) course.  This course is designed to teach real estate agents and brokers how to help their older clients with their unique real estate needs.  Specifically, according to the National Association of Realtors, realtors who take the SRES course will learn “how to recognize and protect their clients from mortgage finance and loan schemes and scams that target 50+ borrowers.”

The views and opinions expressed herein are those of the author(s). Core Compass’s Terms Of Use applies.

About the author

Kent Berk is an attorney and shareholder at the Berk Law Group. The firm is a Scottsdale, Arizona law firm of experienced lawyers committed to vigorous and tenacious representation, customer service, attention to detail, creativity, and integrity. Kent has regularly handles all types of disputes, lawsuits, and arbitrations, with particular emphasis on disputes involving probate, estates and wills, elder law, guardianship/conservatorship, financial exploitation, abuse and neglect of vulnerable adults and real estate. He can be reached by email or by phone at 480.607.7900.

financial exploitationelder abusereal estate professionalsMissouriDelawareWashington
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