Opinion

CA must protect seniors from banking scams

Photo by dizain via Shutterstock

OPINION – Two recent bank meltdowns have dominated the news, making us all think twice about the security of our money. Yet for elderly Californians, the greater threat to their hard-earned money is likely a predatory scammer rather than a bank collapse.

Scams targeting California’s senior population are booming. The rate of elder financial exploitation across the nation has exploded over the past two years, with seniors losing an average of $120,000 per incident and scammers raking in some $3 billion every year.

California’s legislators must take a simple step to protect the savings our older generations depend upon.

William and Ave Bortz, both in their late 70’s, lost more than $700,000 in an online scam that should have been prevented. The couple had banked with Chase for nearly fifty years, during which time they never once wired money, nor did they ever send money to accounts in China. Still, Chase processed a series of unusually large wire transfers (some totaling more than $100,000) to Chinese bank accounts. Despite the transactions exhibiting all the warning signs of a scam, Chase took no steps to protect the Bortz’s, even charging them a $50 wire transfer fee, and inviting them to join an exclusive banking service.

The Bortz’s story is heart wrenching, and they are not alone. Many seniors who have been scammed never recover their life savings.

The Bortz’s story is heart wrenching, and they are not alone. Many seniors who have been scammed never recover their life savings.

Banking institutions are already instructed by the federal government to adopt policies and procedures aimed at protecting elderly customers who are particularly vulnerable to scams and fraud. They are supposed to scrutinize transactions by elder members against established and predicted banking patterns, privately counsel customers who request a suspicious transaction, and report those transactions to authorities who can respond quickly to protect those elder customers from harm.

William and Ave Bortz’s financial ruin is proof that some banks have not implemented these critical protections, apparently comfortable turning a blind eye to elderly customers’ financial vulnerability.

Their recklessness may be due to a wrinkle in California law that makes it nearly impossible for victims to prove that a person, bank or other entity has assisted their scammer in committing a crime. The banks argue in court, often successfully, that they must have had “actual knowledge” of the scam to be liable for assisting a scammer in committing a crime.

Banks aren’t the only entities escaping accountability for assisting scammers in robbing senior citizens. Patricia’s family hired a caregiving company to help their loved one, a 96 year-old widow, with her medications, food, and other necessities. The company knowingly sent Patricia two caregivers with troublesome backgrounds: one who had previously admitted to committing welfare fraud, and the other with a criminal record. These important details were hidden from Patricia and her family.

Within weeks, using Patricia’s checkbook, they had written themselves over 300 checks totaling $750,000. They used the stolen cash to gamble, pay off bail bonds, and enrich their friends and family. While Patricia’s family paid the caregiving company $2,000 every month in fees, its employees robbed her blind.

As the population of Californians aged 65 and older is set to double in the next 20 years, the time is right to establish clear protections for aging adults from the devastating consequences of financial exploitation. Without clarifying the law, banks, caregiving companies, or otherwise have no incentive to implement proactive measures to protect their consumers from the rampant scams and fraud that plague elderly Californians.

Luckily for the victims of these scams, a simple fix is already making its way through the legislature. SB 278 would clarify existing law to its original intent, defining what it means to “assist” a scammer as the difference between whether the entity “knew or should have known” that their behavior would result in harm to an elder or dependent adult.

The California Legislature must take swift action to protect its fast-growing population of aging adults from devastating scams by passing SB 278. This simple clarification to existing law will prevent banks and other institutions from neglecting their elderly customers, and will clear a pathway to justice and financial restoration for countless victims.

Caleb E. Logan, Staff Attorney, Financial Abuse Relief Project, Elder Law & Advocacy

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