Seniors Face Increased Risk for Financial Exploitation During Covid19 Isolation

Our governments have taken severe measures to limit personal interactions with seniors in an effort to protect the population most vulnerable and at risk for the Coronovirus.  Isolating seniors, however, can exacerbate another problem to which seniors are particularly vulnerable: financial exploitation.

According to a recent InvestmentNews article, isolating seniors creates a perfect scenario for scammers to take advantage of them.  Cognitive decline can become heightened in times of stress and loneliness.  Financial advisors, who are often on the front lines of defense when it comes to financial exploitation of the elderly, are postponing and cancelling reviews and meetings with seniors in an effort to keep them safe.

There are still things we can do to keep our seniors safe from financial exploitation during the pandemic.

Several financial regulators, including FINRA and the Federal Trade Commission, have issued warnings to investors to be wary of scams and frauds associated with COVID-19.

If you suspect that your loved one has suffered financial exploitation, give the investment fraud attorneys at Meyer Wilson a call today for a free case evaluation.

Senior Investors Should Add A “Trusted Contact Person” To Their Investment Accounts

In my law practice over the years, I’ve represented numerous senior investors who were the victims of elder financial abuse. In many cases, the fraud may have been detected much earlier if the investor had filled out paperwork with their brokerage firm adding a “trusted contact person” on their investment accounts. All investors, but particularly seniors, should consider adding a trusted contact person on their accounts.

Earlier this month, the Securities & Exchange Commission’s (SEC) Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) issued an Investor Bulletin urging investors to take this important step to protect their investment accounts from fraud or other misconduct.

As the Bulletin explains, a trusted contact person is a person who you authorize your brokerage firm to contact in limited circumstances. Importantly, a trusted contact person is not authorized to make investment decisions on your behalf or direct the purchase or sale of securities in your accounts. However, a trusted contact person can play a critical role in making sure that your accounts are protected.

For example, if your broker has trouble reaching you, a trusted contact person can confirm that your information on file is up to date. Likewise, your financial advisor may notice unusual fund transfers out of your account or other suspicious activity, and a trusted contact person may help respond to concerns about possible financial exploitation.

The same goes for health issues: adding a trusted contact person may help confirm your current health status. And, adding a trusted contact person to your accounts may help confirm the identity of any legal guardian, executor, trustee, or power of attorney on your accounts.

Adding a trusted contact person is easy – you simply fill out and sign a form provided to you by your brokerage firm.

Taking the simple step of adding a trusted contact person to your accounts may help you keep your life savings protected.

DOJ Announces Results of Largest National Elder Fraud Sweep

The FBI and U.S. Department of Justice have released the results of a year-long enforcement effort targeting individuals and entities who capitalize financially by exploiting elderly victims. According to the announcement made at a recent conference by Attorney General William P. Barr, FBI Deputy Director David Bowdich, and Former FBI Director William Webster, who himself was a target of elder fraud, coordinated law enforcement efforts over the past year were a marked success. The data speaks for itself:

The latest federal elder fraud takedown surpassed the numbers of defendants, losses, and victims in the previous year, which was the first targeted federal law enforcement takedown to arise from the passing of the Elder Abuse Prevention and Prosecution Act in 2017. That law, among other things, created enhanced penalties for telemarketing scams which victimize people over the age of 55.

During the DOJ press conference announcing the FBI’s results, former FBI Director William Webster, now 95, spoke to the importance of protecting seniors from unscrupulous fraudsters. His support was a major catalyst for the capture of the defendant who personally targeted Webster and his wife with a Jamaican lottery scam promising riches on the condition that victims first make payments to move the process forward. The Websters didn’t suffer actual losses, like many unfortunate seniors do, but they did receive persistent calls and threatening demands.

The Elder Fraud Problem

Deceit and deception are by no means new tactics for those with the intent to profit from others, nor is targeting the vulnerable for personal financial gain. The sheer scope of elder financial fraud has grown immensely in recent years, as has the exorbitant amounts of money stolen from elderly individuals.

Today, seniors have become one of the largest targets for a variety of scams, as many have accumulated assets and sizable “nest eggs” which make them attractive potential victims to those with ill-intent. Older Americans who grew up in a different era may also be more likely to be trusting and polite, and less likely to understand complex technical, financial, or computer-related matters – characteristics heavily exploited by criminals in a variety of scams.

Types of Elder Fraud

Common types of elder fraud identified by the DOJ and other advocacy groups include:

It’s important to mention that not all cases of investment fraud are solely “scams” perpetrated in foreign countries or by savvy criminals. Some forms of elder fraud involve legitimate advisors and brokers who breach their financial duties and take advantage of senior clients by committing any number of investment products and forms of misconduct, such as misrepresentationunauthorized tradingexcessive activity, and more.

Find more information about elder fraud and other types of investment fraud.

Did You Suffer Financial Losses? Call (800) 738-1960

At Meyer Wilson, our nationally recognized investment fraud and misconduct attorneys have recovered hundreds of millions of dollars in financial losses for clients across the country. While these losses have involved all types of fraudulent schemes, misconduct, and failures to meet legal duties, many of our past clients are elderly victims who suffer tremendous blows to their financial and emotional well-being at vulnerable times in their lives. It’s our mission to help wronged investors navigate the channels most appropriate for them to recover what they’ve lost.

If you have questions about elder fraud or any financial losses involving investment fraud, misconduct, or scams, our attorneys are available to help. Call (800) 738-1960 or contact us online to discuss your rights and options.

Tips to Protect Your Elderly Loved Ones from Financial Exploitation

Senior investors are among the most frequently targeted victims of financial exploitation. In order to better protect this group of people, the Financial Industry Regulatory Authority (FINRA), adopted new rules to allow brokers to take additional steps to protect senior investors and other specific groups, the first nationally standardized protection of its type in the nation. These rules include:

Including an Additional Person as a Point of Contact on Accounts

This new FINRA rule requires brokers to make a reasonable effort to secure someone to fill the role of designated trusted contact person to include on the senior investor’s brokerage account. This person will act as a resource for the brokerage firm who can assist in responding to possible cases of exploitation, the protection of assets, and account administration.

Placing Holds on Suspicious Activity

Placing holds when potential fraud is detected is not a new process in the financial world, brokers now have permission to use the same responses as most banks in these situations. This rule specifically applies to accounts belonging to people 65 years old and above and people with physical or mental impairments that make it difficult for them to protect their investments.

"Before this new rule, firms were really struggling with this day to day," said Jeanette Wingler, an attorney in FINRA's Office of the General Counsel. The new rule gives "the firms time to investigate when a request for a disbursement raises red flags."

Firms or brokers that suspect financial exploitation may be occurring can place a hold on disbursements from that account for up to 15 business days, and may continue that hold for an additional 10 days if additional information supports the initial suspicion comes up during its investigation. The account holder and trusted contact will be notified of the hold.

If you or one of your loved ones was the victim of financial exploitation, our investment fraud lawyers at Meyer Wilson are ready to hear your story. Over the past 19 years, we have successfully recovered more than $350 million in verdicts and settlements for our clients. Send us your information through our online form to set up a free case consultation, or give us a call at one of our office locations to talk one of our attorneys over the phone today.

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Are Brokerages and Advisors Doing Enough to Protect Seniors?

Wall Street is not doing enough to protect senior investors. Financial regulators warn that senior financial fraud is on the rise, and brokerages and financial advisors are responsible for not doing enough to prevent it.

Senior Investment Fraud

According to financial regulators, senior investment fraud is on the rise and financial companies are failing to protect senior investors. Three out of four state securities regulators believe that senior financial abuses have gone undetected and unreported for too long. Most seniors are retired and depend on their retirement investment funds to provide extra income for living expenses and healthcare. Poor investment recommendations and financial losses often put seniors at significant risk. According to the Virginia Department for Aging and Rehabilitative Services, financial fraud and exploitation accounts for an estimated $1.2 billion each year. In an attempt to recover losses, many seniors turn to investment loss attorneys for legal advice.

According to a recent NASAA survey, brokerage firms reported suspected cases of senior financial fraud to adult protective services in 62% of cases, but failed to report it to law enforcement and state securities regulators. Many brokerages and financial investors reported that they had no policies in place to follow for senior investors, and no way to identify investors who became incapacitated by their financial losses. Unlike younger investors who have time to recoup their losses, senior investors can suffer significant lifestyle hardships due to financial exploitation and investment fraud.

To help prevent senior investment fraud, 50% of state securities agencies have started legislation that requires brokerages and financial advisors who suspect fraud to report it. In February 2018, a new rule takes effect that will allow fund transfer delays if financial exploitation is suspected. The new rule will also require brokerage firms to get a trusted contact name for senior investors to use if diminished mental capacity is suspected. New legislation will help to prevent senior investment fraud and claims for losses commonly seen by investment loss attorneys.

Senior investors can take steps to protect their hard-earned retirement savings from all types of loss, whether from legal investment opportunities or investor fraud. Investment fraud impacts people of all ages, but senior adults with retirement savings are particularly lucrative targets for people who are looking to make money from deceptive practices. With millions of baby boomers now in retirement, there are millions of dollars being invested in senior investment funds.

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Senator Enlists Regulators to Help Pass Senior Financial Protection Bill

Meyer Wilson staff gathered around a conference table

Last month, we posted a blog discussing a new program — Senior$afe — created by the Maine Council for Elder Abuse Prevention that would help individuals spot and report financial abuse of elderly investors. The Senior$afe initiative in Maine has been in place for some time now, and over 50 referrals have been reported to agencies regarding suspected elderly financial abuse. Now, Senator Susan Collins (R-ME) has called on the state’s securities regulators to help pass a new federal bill to make reporting of senior financial abuse easier.

The legislation being proposed would allow the employees of financial firms, as well as the firms themselves, to have liability protection if they report possible financial abuse of elderly investors to the proper agency. The bill has seven bipartisan cosponsors, but Senator Collins is looking for more support to ensure the bill can be passed by the Senate Banking Committee. The federal bill would allow all 50 states to place protections for firms and employees who report financial abuse and make the process work more efficiently and easier.

The North American Securities Administrators Association (NASAA) has also introduced new measures to combat elder abuse. It has recently approved a model rule to help protect seniors from financial abuse. This model is now being considered by individual state legislatures and is designed to protect vulnerable adults from financial exploitation by combining mandatory reporting requirements and immunity for reporting.

Learn more about the new bill and what it can do to help protect an elderly investor. If you’ve already been the victim of investment fraud or misconduct, contact our firm today.

Emotions Make Older Adults More Susceptible to Fraud

The partners of Meyer Wilson

According to research from Stanford, the FINRA Foundation, and AARP, inducing older adults’ emotions increases the risk of them buying falsely advertised investments. Brokers who participate in misconduct often use the emotions of the victims to induce transactions. Seniors may be particularly susceptible to fraud.

The study examined the impact that excitement and anger has on one’s decision making when it comes to fraud. The research determined susceptibility in older adults between 65 and 85 years old and younger adults between 30 and 40 years old. After inducing excitement or anger in one group and not inducing any particular emotion in the other group, participants were shown various advertisements designated as misleading by the Federal Trade Commission. They were then asked to rate the believability of each ad and the likelihood to purchase it.

The research shows an increased intention to purchase in the older adults who had their emotions induced compared to the other group. In the younger adults, emotions did not play as much of a role in the decision to purchase. This means that heightened emotions don’t affect young adult investors as opposed to older adults.

Emotions induced were both positive and negative, but the direction of the emotion did not matter in the decision making.

At Meyer Wilson, we are dedicated to protecting elderly investors. You should be aware of the various methods fraudsters may use to induce securities transactions and investments. If you lost money due to investment misconduct, our securities fraud lawyers may be able to help you recover your losses. Call today to schedule your free consultation.

Training for Senior Financial Abuse Awareness Offered by State Regulators

The North American Securities Administrators Association will soon begin training members on how to spot financial abuse of elderly investors. The program, Senior$afe, is designed to help investment advisers and brokers recognize the signs of senior financial abuse and report the matters to the proper authorities.

Senior$afe was created by the Maine Council for Elder Abuse Prevention. It provides brokers and advisers with a presentation showing signs and changes in behavior and account management that could be indicators of senior financial abuse. It also provides details and training on how to respond to potential abuse and reporting the matter.

The goal is to provide training so advisers and brokers are able to identify senior financial abuse and report it to the proper agency so regulators can take action.

At Meyer Wilson, we have successfully represented numerous elderly customers who have been the victims of financial abuse. If you believe that you or somebody you love has been the victim of financial abuse, call our securities fraud attorneys for a free consultation and learn what options you may have.

Survey Shows Slight Decrease in Elder Financial Abuse Claims

Elderly couple look at a laptop

According to the Investor Protection Trust, a nonprofit that advocates investor education, 17% of elderly Americans have been financially abused, which is down slightly from what it was six years ago. 

The decrease may be driven in part by some financial and medical professionals who have begun working together to make sure elderly investors understand various risks and try to stop financial abuse before it starts. Just as important, children of elderly investors are becoming more involved.

Investment fraud may be more common when it comes to elderly investors because scammers may play upon their vulnerabilities. If your elderly loved one was financially abused by a broker or brokerage firm, they may be able to take action to recover the losses. At Meyer Wilson, our securities fraud lawyers are determined to make sure elderly individuals are protected from any kind of financial misconduct. Schedule your free consultation with our firm and discover your options for filing a claim.

Financial Predators Turn to Insurance Products to Target the Elderly

As the baby boomer generation continues to age, financial abuse grows in products like annuities and life insurance, a shift from fraud tactics of years past. 

Historically, unscrupulous advisors have avoided products like annuities and life insurance, but that has changed drastically in recent years. Fraudsters see the potential value in annuities and life insurance, and have ramped up their efforts to capitalize on it.

Even legitimate insurance companies may try to push risky and potentially unwise policies on their clients, like variable universal life policies.

People 65 and older are estimated to hold more than 70 percent of our nation’s personal wealth. No wonder they are a prime target for scammers, especially when you consider the fact that approximately 10,000 people reach this age range daily.

Insurers have had to adapt their products to meet the growing demand, but changes to products warrants a change to the products safeguards as well, and the insurance industry is just now catching on. These safeguards not only need to detect fraud, but prevent it from happening.

What is being done to curb the abuse?

Securities regulators have been strengthening their approach to the elder financial abuse problem by proposing and enacting various laws that aim to both encourage reporting of abuse and preventing it. For example, the Financial Industry Regulatory Authority (FINRA) proposed a rule last year that would require financial firms to do their due diligence to get the name and contact information of a “trusted individual” for each investor. You can read more about those proposals here.

Meyer Wilson Talks About Financial Abuse of the Elderly

Meyer Wilson has many valuable resources on the topic of financial exploitation of our nation’s seniors. To learn more, visit:

If you believe that your elderly loved one has become the victim of financial fraud, contact the securities fraud lawyers at Meyer Wilson for a free case review today.