Sen. Susan M. Collins
From scams originating overseas to exploitation by trusted family members and guardians at home, financial fraud targeting older Americans is a growing epidemic that costs an estimated $2.9 billion annually. As Chairman of the Senate Aging Committee, one of my top priorities is to protect seniors from the criminals who seek to rob them of their hard-earned life savings.
The Aging Committee has been vigorously investigating fraud and financial exploitation against seniors. One factor common to all the scams we have examined is that fraudsters need to gain the trust and active cooperation of their victims. The Senior $afe Act I have introduced in the new Congress would put in place a commonsense plan to help protect American seniors from financial exploitation and fraud. The bill encourages financial institutions to train their employees in how to spot financial exploitation of older Americans, and shields them from lawsuits for making good faith, reasonable reports of potential fraud to the proper authorities.
I am so pleased that this important legislation has received the endorsement of AARP, our nation’s largest senior organization. In addition, the Senior $afe Act is supported by many financial-services regulators and providers across the country.
This bipartisan legislation is based on Maine’s innovative Senior $afe program, a collaborative effort by Maine’s regulators, financial institutions, and aging and legal organizations to educate bank and credit union employees on how to identify and help stop financial exploitation of older Mainers. Last year, the Senate Aging Committee held a hearing examining programs on the state level that aim to stop financial exploitation of seniors. Included in this hearing was testimony from Jaye Martin, the Director of Maine’s Legal Services for the Elderly. During the hearing, I asked Ms. Martin about the effectiveness of the Senior $afe program in fighting the financial exploitation of seniors in Maine.
In response, she stated: “Senior $afe has been an extraordinary success… Hundreds of financial institution managers and employees have been trained, and we are really seeing that increase the number of seniors that are getting help before it’s too late.”
Current bank privacy laws can make it difficult for financial institutions to report suspected fraud to the proper authorities. The Senior$afe Act would address this problem by encouraging banks, credit unions, investment advisors, broker-dealers, insurance companies and insurance agencies to report suspected senior financial fraud, and would protect these institutions from being sued so long as they have trained their employees, and make reports in good faith and on a reasonable basis to the proper authorities.
The first of its kind in the United States, Maine’s Senior$afe program was launched in 2014 and has empowered and encouraged financial service representatives throughout our State to identify warning signs of common scams and help stop financial fraud targeting our seniors. Two recent cases illustrate the importance of this initiative:
- Early last year, a Maine attorney was sentenced to 30 months in prison for bilking two elderly female clients out of nearly a half a million dollars over the course of several years. The lawyer’s brazen theft was uncovered when a teller at a local bank noticed that he was writing large checks to himself on his clients’ accounts.
- Also last year, a senior citizen intended to wire funds from his account at a Maine credit union to an out-of-state location, supposedly to bail-out a relative who was in jail. This transaction didn’t sound right to the teller supervisor at the credit union. She questioned the customer, who told her he had received a call from an “official” at the jail, who had instructed him not to speak to anyone about the transaction. Fortunately for this senior citizen, the supervisor had received training through Maine's Senior$afe program. She was able to spot this as a scam, and her quick thinking saved this senior from falling victim to it.
Maine’s Senior$afe program trains financial-service professionals to spot the red flags that signal potential fraud. Unfortunately, many seniors miss these flags because the swindlers who prey on them are extremely crafty and know how to sound convincing and trustworthy.
A warning sign that can slip by a victim, however, might trigger a second look by a financial service representative trained to spot common scams and who knows enough about a senior's habits to question a transaction that doesn’t look right. In our work on the Aging Committee, we have heard of many instances where quick action by bank and credit union employees and investment advisors has stopped a fraud in progress, saving their customers untold thousands of dollars.
Combating financial abuse of seniors requires regulators, law enforcement, and social service agencies at all levels of government to work collaboratively with the private sector. Financial institutions occupy a critical nexus between fraudsters and their victims and can play an important role. Their employees, if properly trained, can be the first line of defense protecting our seniors from these fraudsters. Based on the outstanding model created here in Maine, the Senior$afe Act will give financial professionals nationwide the ability to combat fraud when they see it, as they safeguard the privacy of their customers, so that all of America’s seniors can enjoy the greater security this important program is providing here in our State.