Elderly investors can be especially vulnerable to financial abuse from close family, friends, and hired professionals. In some cases, brokers and advisors have cultivated close relationships with elderly investors, only to exploit their trust for their own financial gain.
Elder Financial Abuse: All Too Common
The National Council on Aging estimates that one in 10 Americans aged 60+ has experienced elder abuse, at a cost of $2.6 billion to $36.5 billion annually.
Why are older adults targeted? Studies show that higher levels of trust among older adults may have something to do with changes in the brain–changes that occur even in the absence of dementia. Additionally, caretakers often have access to a lot of personal information, which can make it easy for bad actors to perpetrate fraud.
Signs that an elder is being abused financially include unpaid bills, sudden changes to wills and spending patterns, or unexpected moves to add a beneficiary, executor, or power of attorney to the elderly person’s estate.
Legal Protections For Elders
Because so many elders are vulnerable to financial abuse, states such as New York, Florida, and California have enacted legal protections for the elderly. Also, the Financial Industry Regulatory Authority (FINRA) has implemented rules to protect elders from financial abuse. These include:
- FINRA Rule 4512: Firms have to make reasonable efforts to obtain a trusted contact person’s name and contact information when opening an account and must contact that person if they suspect financial exploitation or diminished capacity.
- FINRA Rule 2165: Firms can place a temporary hold on disbursements from an elder’s account if they suspect elder financial exploitation so that a trusted contact can investigate.
- FINRA Rule 3241: Brokers cannot be named as the beneficiary or an executor of a client’s estate except in carefully specified circumstances.
If you suspect you or a relative may have been the victim of elder financial abuse, contact a securities attorney right away. Securities attorneys at Patil Law can evaluate your case for free and pursue an aggressive strategy for financial recovery. Call 800-950-6553 or email cp@patillaw.com.
