Hagerty, Gallego Reintroduce Legislation to Prevent Financial Exploitation of Seniors

WASHINGTON-Yesterday, United States Senators Bill Hagerty (R-TN) and Ruben Gallego (D-AZ) reintroduced the Financial Exploitation Prevention Act, legislation to give the financial industry better tools to address suspected financial exploitation and abuse of seniors and those with mental and physical disabilities.

"Older Americans are being exploited through financial scams, losing billions of dollars each year," said Senator Hagerty. "I'm pleased to reintroduce this legislation with Senator Gallego to provide financial professionals the ability to address the growing issue of financial exploitation and abuse of vulnerable investors."

"Far too many Arizona's seniors fall victim to scammers who target their hard-earned life savings," said Senator Gallego. "Once the money is gone from their accounts, it's almost impossible to get back. I'm proud to lead this legislation to strengthen the financial industry's banks' ability to step in when they suspect fraud and give seniors a critical safeguard against bad actors. This bill will protect Arizona's retirees and keep their accounts safe when they need them most."

Background:

The Financial Exploitation Prevention Act would give the financial industry better tools to address suspected financial exploitation and abuse of seniors and those with mental and physical disabilities. First, the bill requires the Securities and Exchange Commission to report to Congress on recommendations for legislative and regulatory changes on how to combat financial exploitation of seniors and vulnerable adults. Second, the bill permits a registered open-end investment company or transfer agent for that company, including mutual funds, to better protect seniors by delaying the redemption period of any redeemable security if it was reasonably believed that such redemption was requested through the financial exploitation of a security holder who is a senior or an individual unable to protect their own interests.

Over the next 10+ years, 10,000 Americans will turn 65 every day, with seniors making up 18 percent of the nation's population by 2030. As more investors age into retirement, their risk of exploitation increases. Currently, about one in five senior investors are victimized by financial fraud, and those investors lose an estimated $2.9 billion annually in reported cases.

Full text of the legislation can be found here.

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