Proposals that aim to stem the financial exploitation of seniors and disabled adults are being considered in the state legislature.
Representatives Mark Parkinson (right) and Jay Barnes (photo courtesy; Tim Bommel, Missouri House Communications)
Two House bills and one bill in the Senate propose letting a financial agent who suspects a senior or disabled adult client is being financially exploited or defrauded refuse to disburse funds from that client’s account. After that refusal the agent has two business days to notify all those who can make transactions on that account of the refusal, and three business days to contact the Department of Health and Senior Services and the Commissioner of Securities.
The bills also would allow that agent to contact a family member, legal guardian, or other person with a legal connection to the client and notify them of the possible fraud. Currently an agent cannot reach out to someone who is not an authorized party on the account. After 10 days the transaction would proceed unless extended by court action.
Representative Mark Parkinson (R-St. Charles) sponsors one of those bills.
“Unfortunately we have to deal with this issue where seniors are being defrauded,” Parkinson told Missourinet.
Presenting the bill to a House committee, Parkinson offered the example of, “a home health care worker or unscrupulous neighbor” taking advantage of a friendship with a senior.
“They convince the elder to go add their name as a beneficiary on their trust account,” said Parkinson. “I heard stories from some brokers who could see what was going on. They just didn’t have the authority to say something about it so they would go ahead and add a home health care worker’s name as a beneficiary on an account. Everybody knew it was wrong but they didn’t have the authority to say something about it.”
Parkinson says under his bill, agents would have that authority. “They’re able to throw up a red flag and say, ‘Hey, something unscrupulous may be going on.'”
Senate sponsor Eric Schmitt (R-Glendale) says it allows agents to hit a “pause button” when they suspect fraud involving a client they already have a relationship with.
“The problem now is once the money is gone, the money’s gone, so this is our attempt to try to address that in a reasonable way,” said Schmitt.
The proposal was supported by several representatives of the securities industry, some of whom raised other instances of fraud or scams they believe the bill could have halted.
John Ellis with Edward Jones in St. Louis said one such situation in North Carolina was mentioned to him.
“One of our financial advisors had a client who was wanting to send money to Jamaica. Betty in Kingston, Jamaica, had befriended him, and we tried to convince this client that he’s being defrauded, and he just won’t listen to us,” said Ellis, who described the individual as, “an elderly client who has sent tens of thousands of dollars out of his account.”
Ellis thinks the legislation would allow agents to be proactive.
“It would give us a little time to be able to reach out to a family member, to reach out to the client, to try to convince the client that what they’re doing is going to be harmful to them in the long run,” said Ellis.
Other securities industry spokespeople testified that the bills might keep clients from falling victim to scams in which an individual is told he or she has won a lottery in a foreign country and needs to send money in order to claim a prize.
Similar language has been enacted in the State of Washington and in Delaware.
The Senate bill is SB 244. Parkinson’s bill is HB 645 and a similar bill, HB 636, is sponsored by Representative Jay Barnes (R-Jefferson City).
