By Joanne Arbogast
The Daily Item
As criminals continue to target seniors for financial scams, U.S. Sen. Bob Casey, a Pennsylvania Democrat, has introduced legislation that would stiffen penalties for fraud against the elderly.
“Seniors are particularly vulnerable to financial scams so it’s vital that the federal government take steps to protect them,” Casey said introducing the The Senior Investor Protections Enhancement Act on June 18.
“This legislation will provide a strong deterrent to would-be scammers who would prey upon seniors,” he said. “Seniors represent a disproportionate amount of all fraud cases and the cost of these crimes has been trending upward. What’s needed are strong laws that make the consequences of these financial scams daunting.”
Americans over the age of 65 control an estimated $18 trillion in assets, a large portion of which is investable. Seniors have difficult and complicated decisions to make on how to stretch their savings throughout their retirement.
In making these financial decisions, seniors are often targeted with scams. Despite making up only 14 percent of the nation’s population, seniors — according to the Federal Trade Commission — accounted for 26 percent of reported fraud in 2012.
The cost of this financial fraud is significant. Casey referred to a 2011 study by MetLife that estimated the losses from financial elder abuse at more than $2.9 billion, a 12 percent increase over a previous estimate MetLife did in 2008.
As the number of seniors grows significantly over the next few decades, the problem isn’t going to go away. In fact, it’s expected to get far worse. Today, there are 43 million Americans aged 65 and over — that’s one in seven Americans.
The Senior Investor Protections Enhancement Act of 2013 would amend several federal laws including the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940.
Under the bill, the maximum civil penalties for violations that are primarily directed toward or committed against a senior (age 62 or older) would be increased. The bill would increase the maximum civil penalty for violations against seniors by $50,000. Current fines range from $5,000 to $100,000 for individuals and $100,000 to $550,000 for businesses.
The bill also directs the United States Sentencing Commission to review and amend federal sentencing guidelines and policy statements to ensure that guideline offense levels and enhancements appropriately punish criminal violations of the securities laws against seniors.
Casey said he would work toward bipartisan support of the bill in the upcoming months.
‘Seniors need more help’
Casey also referred to research by Investor Protection Trust, a Washington, D.C.-based nonprofit organization devoted to investor education (www.investorprotection.org).
In August 2012, IPT partnered with the Investor Protection Institute in an online survey of 756 experts on elder fraud and financial exploitation.
The results showed family members (79 percent), caregivers (49 percent) and swindlers (47 percent) are the top financial exploiters of older Americans.
The experts polled were a diverse group of state securities regulators, financial planners, health care professionals, social workers, adult protective services, law enforcement officials, elder law attorneys, academics and others — about two thirds (65 percent) of those surveyed deal with elderly victims of investment fraud/financial exploitation.
Three out of four experts said that such swindles are a “very serious” problem in America today and an even greater number — 78 percent — said older Americans are “very vulnerable” to investment fraud/financial exploitation and most seniors do not have the information they need to help them protect their savings.
Over half of those surveyed (53 percent) said that “the available resources for seniors when selecting a financial advisor with appropriate knowledge to address their specific financial needs” are either not very effective or not effective at all. Under a third (30 percent) said the resources are somewhat effective or very effective.
Don Blandin, president and CEO, Investor Protection Trust, said, “Our new survey shows that financial swindles targeting older Americans are a bigger problem today than ever before and that seniors need more help. Putting a major dent in the problem will require new and innovative collaborative efforts by many different experts and organizations, both public and private.
“Our survey makes it clear that those efforts need to take root all across America and then link up with other groups and their programs in order to reduce the attack on the investment and life savings of older Americans.”