By Daniel S. Williford

Financial exploitation of the elderly continues to be one of the fastest growing forms of elder abuse.  As population dynamics shift to a higher percentage of U.S. citizens over 65, the trend is likely to grow. Misdeeds often include unauthorized use or theft of property, abuse of powers of attorney, misuse of ATM, credit cards and joint bank accounts, appropriation of pension and benefit checks, illegal property transfers, consumer fraud and scams. For example, a daughter transferred her mother’s funds into her own checking account using a power of attorney that did not allow gifting.  In court, the transfer was deemed invalid because the daughter could not show that the transfer was made in a fair, open, voluntary and well-understood manner.

To combat these issues, new regulations are underway.

New York State Assembly Bill A6395

Proposed amendments to the New York Banking Law would allow banks to put a hold on transactions when the bank has a reasonable belief to suspect financial exploitation of a vulnerable adult and require them to contact Adult Protective Services for potential investigation.  The Elder Law and Special Needs Section of the New York State Bar Association objected to the proposal because the definition of “vulnerable adult” and the transaction hold and reporting requirements were vague.

As a result, the proposed bill now requires the Superintendent of the New York State Department of Financial Services to develop guidelines for reporting suspected financial exploitation and provides immunity to third parties disclosing potential abuse.  The bill passed the New York State Assembly and currently awaits a vote in the New York State Senate. 

 FINRA Rules

Effective February 5, 2018, the Financial Industry Regulatory Authority issued new regulations approved by the SEC that permit members to place temporary holds on disbursements of funds or securities from customer accounts if there is reasonable belief the customer is being exploited.  This applies to adults age 65 and older, and to those age 18 years and older when the member believes the individual has a physical or mental impairment. 

Members are further required to make reasonable efforts to obtain the name and contact information of a trusted person to be listed on the elderly customer’s account in the event of questionable activity.  Generally, asking customers to provide the contact information is sufficient to satisfy this requirement. Should the customer decline to provide such information, the member may still open an account.  

Every elder law attorney has an obligation to their clients to ensure they are protected financially and to avoid conflicts of interest.  Taking the above preventative regulatory steps is important as it can be difficult and costly to unwind the effects of elder financial exploitation. 

For assistance with these matters, please contact a member of our Wills, Trusts & Estates practice. 

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

 About MCCM

McConville Considine Cooman & Morin, P.C. is a full service law firm based in Rochester, New York, providing high quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.