With technology becoming increasingly prominent in our every day lives, the risk of financial exploitation has increased as well. Those that are especially at risk include the elderly and adults with mental or physical impairments and scammers know to take advantage of them. Instances of financial exploitation commonly involve:
- Telephone scams requesting money for a loved one in trouble; financial information; donations; or claiming you are the winner of a lottery or sweepstakes
- Professional” scams where people are pressured into taking out loans or participating in investment schemes that promise unrealistic returns
- Misuse of a Power of Attorney or joint bank accounts by family members
Recent research has concluded that 90% of those who exploit these vulnerable adults, are family members or other trusted people in their lives and can leave an elderly or disabled adult without money, housing, or trust in others.
However, the United States Securities Exchange Commission (SEC)-which is responsible for providing data, capital information, enforcing federal securities laws and regulating the market-has begun taking steps to remedy this problem. Beginning February 5, 2018, a new rule has been adopted in an effort to help prevent these adults from being stolen from. The new rule comes from the Financial Industry Regulatory Authority (FINRA) and is known as FINRA Rule 2165 or Financial Exploitation of Specified Adults.
The rule will allow brokerage firms who are members of FINRA to place temporary holds on suspicious disbursements of funds or securities from the accounts of the named customers in instances where there is a reason to believe that they are being financially exploited. This hold can last for up to 15 days and can be extended for an additional 10 days by a brokerage firm holding the account.
Another major role this rule plays is requiring these firms to make “reasonable efforts” to account for the name and contact information of an individual over the age of 18 who is trusted by the customer who will be allowed access to the account. They will also need to inform the customer and account holder that the firm will be permitted to disclose information about the account to the trusted contact in order to prevent potential instances of financial exploitation.
If you or a loved one has been financially exploited or suspects that financial exploitation may have occurred or been attempted, the experienced elder law attorneys at the Law Offices of Hunziker, Jones, & Sweeney can help you protect your assets and pursue legal remedies against those responsible. For more information or to schedule a consultation, contact our New Jersey elder law firm at (973) 256-0456.
