A new survey conducted by the North American Securities Administrators Association found that there was been an increase in senior financial fraud incidents, with 97% of incidents going unreported until serious harm has occurred. The survey respondents, all state securities regulators, noted a 29% rise in complaints or cases involving older investors who were bilked or exploited.
The Pulse Survey took place between July 24 to August 4, 2017. Among other findings:
· Three-fourth of regulators that put into effect the Model Act to Protect Vulnerable Adults from Financial Exploitation were able to stop funds from going to fraudsters who had targeted older investors.
· Seniors 70 years of age and over is the demographic that regulators consider most vulnerable to becoming victims of financial fraud.
· 97% of the regulators reported that while there is a greater awareness of senior investment exploitation and fraud, the number of incidents of fraud have not gone down. 29% of regulators reported seeing an increase.
· Three-fourths of respondents said that they believed investment advisors and brokerage firms could do more to help prevent senior financial fraud.
In June, NASAA conducted another survey in which the respondents were brokerage firms. A number of the broker-dealers disclosed that they were taking action to combat senior financial fraud, including implementing trainings to help employees become more able to identify incidents of elder financial fraud abuse. The respondents said that in 2015 alone there had been almost 2300 cases involving financial fraud. Also:
· 70% of the 60 broker-dealers that participated reported not having any policies to specifically address issues involving seniors.
· Less than half of participants said they had a form for customers to fill out in which they could name a trusted person to serve as an emergency contact in the event that an older investor client were to be come incapacitated.
· Firms reported possible incidents of senior financial fraud 62% of the time that they suspected this type of abuse.
· They only notified local law enforcement 4% of the time.
· Firms disclosed less than 1% of suspected elder financial fraud incidents to state securities regulators.
Beginning in February 2018, all brokerage firms will be required to ask every customer to provide the contact information of a person that they trust in the event that the investor were to become incapacitated. Brokerage firms also will be able to stall fund transfers when financial exploitation is suspected.
In the June survey, seniors in the 81 to 90 age group were identified as the group most at risk of becoming victims of elder financial fraud.
Senior Financial Fraud
Delays in identifying when fraud is happening can prove catastrophic to senior investors, many of whom are already retired and/or are living off their life savings. If you are an older investor that has suffered such losses, it is important that you are represented by a senior financial fraud lawyer who knows how to handle your claim and will fight for your financial recovery. If someone you love has sustained elder financial fraud losses, our securities fraud law firm can help you determine whether you and your loved one have grounds for a case.
To schedule your free case consultation, please contact Shepherd Smith Edwards and Kantas, LTD LLP today.