Last year, a survey released by the Investor Protection Trust indicated that at least 20 percent of Americans over the age of 65 had been the victim of financial abuse and/or financial fraud. In an effort to address the problem, new bills aimed at protecting senior citizens from investment fraud have been making the rounds in both the House and the Senate.
The Preventing Affinity Scams for Seniors Act of 2011 (HR 370), proposed by Rep. Joe Baca (D-Calif.), was referred to the Subcommittee on Financial Institutions and Consumer Credit last month. Also in March, Sen. Herb Kohl (D-Wis.) introduced two senior protection bills in the Senate ("ELDER FINANCIAL FRAUD: Protecting seniors from scammers," InvestmentNews, April 6, 2011). Both Senate bills have been referred to the Committee on the Judiciary.
HR 370 specifically targets affinity fraud, a leading type of elder financial fraud: "Millions of elderly are scammed each year, losing at least $2,600,000,000 a year to thieves, many of whom are in their own families (conservative estimate given of the schemes left unreported)." The bill would "require financial institutions to offer services to protect seniors from affinity scams [and] to report suspected affinity scams."
S 462, one of the bills introduced by Sen. Kohl, would strengthen law enforcement efforts and the prosecution of crimes against seniors ("Mickey Rooney: I was financially abused," InvestmentNews, March 2, 2011). It would also establish an Office of Elder Justice at the Department of Justice. The other Senate bill, S 464, would establish a grant program to fund training and service programs designed to prevent and/or end abuse in later life.
To learn more about a brokerage firm's role in preventing and detecting elder fraud, watch the video below.