INDIANAPOLIS (April 26, 2016) — Secretary of State Connie Lawson’s legislation that will allow financial professionals to share financial records with law enforcement and hold a disbursement of funds if they believe a senior or vulnerable adult is being financially exploited has been signed by Governor Pence and will become law on July 1, 2016. The new law creates incentives to encourage broker-dealers to report potential financial exploitation as early as possible, when their intervention may be able to prevent harm or limit the damage to victims of financial exploitation.
“I am happy to announce the signing of this legislation during Money Smart Week,” stated Secretary Lawson. Money Smart week falls at the end of April, which has been designated Financial Literacy Month. By partnering with organizations across the state and nation during the month of April, the Secretary of State’s office hopes to play a role in breaking the taboo that surrounds speaking openly about finances and money.
Secretary Lawson went on to say, “Seniors are a particularly vulnerable group, with an estimated $2.6 billion lost annually to financial exploitation. In some cases it is a family member or care giver that is exploiting a senior citizen. Currently, if a broker-dealer notices suspicious activity, they cannot deny a request to withdraw. This law will remove the barrier and allow them to alert authorities to unusual activity, allowing my office, financial professionals and adult protective services to work in partnership to protect Indiana’s most vulnerable investors.”
The new law will allow broker-dealers, who often manage seniors’ retirement accounts, to not only alert authorities, but also to refuse a request for funds if there is a reasonable belief that the disbursement will result in financial exploitation of the financially endangered adult. The refusal is good for 15 days, with additional extensions possible as an investigation develops. The law also outlines which third parties may be notified of the suspected financial exploitation.
“Financial exploitation of a seemingly healthy adult is often difficult to detect,” said Indiana Securities Commissioner Alex Glass. “Broker-dealers are in a great position to catch a potential issue early as they have a close relationship with the individual and will be the first to see a pattern of unusual or troubling activity in a customer’s account.”
Indiana has a growing senior population which is a highly targeted demographic. Studies report that one in five seniors have been victims of financial fraud, including exploitation by friends and family members, abuses of powers of attorney and a number of other dangers. The National Adult Protective Services Association estimates that only 1 in 44 cases of financial exploitation are ever reported.
Indiana is the fourth state to enact such a law, joining Washington, Delaware and Missouri.
For more information on how to protect yourself or your loved ones, visit indianamoneywise.com.