Massachusetts needs a new tool against scammers who target elders
Federal efforts have been largely aimed at spreading the word, educating people about each new scheme as it picks up speed.
The fact pattern is now so well established that it’s referred to as the “grandparent scam.”
Someone purporting to be the grandchild in trouble calls granny needing bail money or money for a lawyer, who then gets on the phone to confirm the “crisis.” Grandma rushes off to the bank to get the required cash, packs it up as told to hand to a courier or Uber driver sent to pick it up. Then it’s usually gone forever.
A 93-year-old Pembroke grandmother is among those who have fallen for such a scam. But she has plenty of company here and around the country. Online and digital scammers cost Americans $10 billion last year, according to the FBI — about $3 billion of that was lost by seniors.
And only 1 in 44 incidents of elder financial exploitation is reported, according to the National Adult Protective Services Association.
Seniors are often too embarrassed to tell even family members that they have been scammed.
“It’s a frequent enough problem that we really need to do something about it,” Secretary of State Bill Galvin told the editorial board. “The sophistication of the scammers has increased. And if an electronic transfer is used, once that money disappears, it’s gone.”
And so Galvin has filed a bill designed to put the brakes on a transaction if a bank teller, broker, or financial adviser suspects that an elder (defined as 60 and older) or disabled adult client is in danger of being exploited. It allows financial institutions to delay a disbursement and notify a relevant adult protective services agency and the secretary’s office if there is “reasonable cause” to believe financial exploitation has occurred or is being attempted.
“By and large these people [who are being scammed] are competent,” Galvin said. “But they need a little time, a little breathing room to reconsider.”
That’s Galvin’s aim with the bill — slow down the process that scammers have counted on to push panicked elders into making hasty decisions. The proposed state legislation pairs nicely with an ongoing federal effort — under the 2018 Senior Safe Act — that offers bank and financial services employees training on spotting potential victims and immunity when they report such incidents to authorities.
Galvin’s bill, filed in conjunction with Senator Paul Feeney and Representative James M. Murphy, cochairs of the Joint Committee on Financial Services, would also provide immunity from civil liability for those bank employees trying to do the right thing.
Now, not all scammers are strangers. It’s not uncommon to have family members attempt to exploit elders, and a few of those cases have been reported to Galvin’s office by brokers and financial advisers. In fact, according to a 2019 study by the Consumer Financial Protection Bureau, “losses were greater when the older adult knew the suspect.”
Galvin’s bill deals with that possibility as well, including a provision designed to make sure that relatives or other third parties who might actually be engaged in the exploitation of elders themselves aren’t notified of a bank’s suspicions.
Federal efforts, including those of the Justice Department, have been largely aimed at spreading the word, educating people about each new scheme as it picks up speed. But for many that will come too late. States are now trying to close that gap — to take the more proactive slow-it-down approach.
A bill backed by Secretary of State Brad Raffensperger of Georgia and passed unanimously by both branches of the Georgia Legislature took exactly that approach. The Senior Protections from Exploitation Against Retirees Act was signed into law by Governor Brian Kemp in May.
Earlier this month, Connecticut Governor Ned Lamont signed a bill to give financial institutions the ability to suspend disbursements for up to 45 days if the exploitation of an elder is suspected. (The Massachusetts bill’s holds would expire after 15 days.) The Connecticut bill goes into effect July 2024. It too passed unanimously in both legislative branches.
Now Georgia, where Republicans hold both branches of the Legislature and the governorship, and Connecticut, where Democrats hold all three, would seem to have little in common — except perhaps their common-sense approach to doing the right thing by seniors — preventing their exploitation before it robs them of their savings.
The Galvin-Feeney-Murphy bill is all about doing the right thing by seniors here in Massachusetts. If Georgia and Connecticut can get it done, we can too.