California’s Expanding Financial Elder Abuse Laws

Over the past five years, California’s lawmakers have been increasing protections for elders, defined as California residents age 65 or over, including protections to address the growing problem of financial institution involvement in financial elder abuse.

Lawmakers enacted amendments to California’s elder abuse laws in the Financial Elder Abuse Reporting Act of 2005, which went into effect nearly three years ago. As of January 1, 2007, financial institutions, including banks and credit unions, as well as their employees, are required to report suspected incidents of financial elder abuse. The amendments also added civil fines ranging from $1,000 to $5,000 which may be levied against financial institutions if their employees fail to report abuse as required under the Act.

In 2008, lawmakers expanded elders’ rights again with the enactment of a California Senate Bill that expanded the definition of financial elder abuse to include situations where “undue influence” is used to misappropriate an elder’s property. The bill also expanded elders’ rights by making it easier for elders to prove that the misconduct meets the law's requirements that the taking be for a “wrongful use.”

California’s Current Definition of “Financial Elder Abuse”

As it is now defined, financial elder abuse in California occurs when: “a person takes, secretes, appropriates or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud, or both” or does so by the use of “undue influence,” including through the use of “an agreement, donative transfer, or testamentary bequest.” Assisting a person in committing prohibited conduct is also a violation of the law. (California Welfare & Institutions Code § 15610.30(a)-(c).)

If You Suspect Financial Abuse, We Can Help You

Financial elder abuse can take many forms, including overpaying for services such as home repairs, outright gifts of cash, telemarketing scams, or convincing an elder to invest in inappropriate or highly risky investments, such as annuities which yield little return to the elder, but pay high commission to the sales agent. If you suspect that you or a loved one has been a victim of financial elder abuse, contact The Casiano Law Firm for a confidential consultation.

Financial Elder Abuse Is a Growing Concern for California’s Growing Elderly Population

As the “boomer” generation ages, experts predict that the problem of financial elder abuse will boom as well. Incidents of elder abuse in California and across the nation are already becoming an issue of serious concern among lawmakers.

The California Department of Aging reports that by 2050, there will be 14.6 million Californians over the age of 60 and that between 2010 and 2020, there will be a 128% increase in the number of Californians in that age group. The report also states that San Diego County can expect a 96% increase in the number of residents over the age of 60 between 2010 and 2030.

Recent Headlines Highlight Financial Elder Abuse Problem

California news headlines are replete with recent incidents of financial elder abuse committed by financial institutions. Here are just a couple of examples of the egregious behavior that has been in the news recently. On February 4, the San Francisco Chronicle reported that a Bank of America customer service representative has been charged with stealing $61,000 from a 96-year-old woman after convincing her to allow him access to her accounts as her personal banker. On January 10, 2010, Investment News reported that a Financial Industry Regulatory Authority (FINRA) arbitration panel awarded a 95-year-old man $1.6 million after finding a Beverly Hills investment firm and two of its brokers guilty of self-dealing. The brokers convinced the man to leverage his equity in his home to make overly risky investments. (FINRA is an independent regulatory agency, empowered by the federal government to oversee securities and brokerage firms and protect investors.)

$2.6 in Annual Losses

According to a study released last year by the MetLife Mature Market Institute, the National Committee for the Prevention of Elder Abuse, and the Center for Gerontology at Virginia Polytechnic Institute and State University, financial elder abuse results in an annual loss of $2.6 billion. The study also found that that the people who commit the abuse are usually people in a position of trust, including family members and business professionals. Common types of financial elder abuse committed by business professionals included: false sales of and misrepresentations concerning stocks and other investments; and fraudulent banking practices including “account draining or siphoning.”

We Help Victims of Financial Elder Abuse

If you suspect that you or a loved one has been a victim of financial elder abuse, we can help you. Contact The Casiano Law Firm for a confidential consultation.