Aging Research Winter 2015

Examining New Legislation to Combat Elder Fraud

Fraud Alert

On July 23rd, 2013, Governor Pat McCrory signed Senate Bill 140, “Financial Exploitation of Older Adults,” into law as N.C. Session Law 2013–337. The new law is the culmination of several years of work and research on fraud committed against the elderly, a resulting Task Force comprised of legislative, state agency, law enforcement, and financial sector representatives, and a bill introduced by one of the legislators serving on the Task Force.

This new legislation is designed to increase the communication between the financial sector, social services departments, and law enforcement in potential cases of financial fraud against seniors in North Carolina. The existence of fraud committed against the elderly was prevalent when the Center began focusing on the issue years ago, and the problem continues today. The Federal Trade Commission’s most recent data rank North Carolina 23rd out of the 50 states in the number of fraud complaints per capita and 24th in the number of identity theft complaints per capita. More than 48,000 consumer complaints related to identity theft and fraud were reported in North Carolina in 2013. The FTC says that people over 50 account for almost one-half of all consumer fraud complaints, and more than a third of all identity theft complaints.

As background, in 2011, the Center presented research and recommendations to the N.C. General Assembly’s Legislative Study Commission on Aging. During the 2011 legislative session, the N.C. General Assembly passed legislation citing the Center’s research on fraud against older adults and establishing the Task Force.

Co-chaired by Senator Stan Bingham (R-Davidson) and Representative Hugh Blackwell (R-Burke), this Task Force on Fraud Against Older Adults includes key stakeholders from the financial industry including the N.C. Bankers Association, the State Employees Credit Union, and the Commissioner of Banks; state agencies such as the Division of Aging and Adult Services, the Attorney General’s Office, and the State Treasurer’s Office; advocacy groups including AARP and the Senior Tar Heel Legislature; and law enforcement groups such as the FBI, the N.C. Conference of District Attorneys, and the N.C. Chiefs of Police.

Two representatives from the N.C. Center for Public Policy Research also served on the Task Force. The Task Force convened for meetings during 2011, 2012, 2013, and 2014, and produced a Task Force Report that included recommendations to submit to the N.C. General Assembly.

Near the beginning of the 2013 legislative session, Sen. Bingham used the recommendations and introduced Senate Bill 140, a bill “to increase the recognition, reporting, and prosecution of those who would defraud or financially exploit older adults, and to continue the Task Force on Fraud Against Older Adults.” After hearings in two Senate committees and one House committee, the bill passed the Senate 47–0 and with a vote of 111–1 in the House. Governor Pat McCrory signed the bill into law as N.C. Session Law 2013–337.

Under the new legislation, an older adult is defined as any person 65 years or older and protected against exploitation under the law. Previously, the older adult had to meet an age threshold and be unable to safeguard their own rights and resources.

The new law encourages financial institutions to maintain a list of individuals for any disabled or older adult customer that the institution can contact in the case of suspected financial exploitation. Financial institutions now have a duty to report suspected fraud against a disabled or older adult customer to local law enforcement or the department of social services, and good faith reports are protected from liability. The legislation sets out a process for law enforcement or social services to obtain the older or disabled adult’s financial records following a credible report of suspected fraud.

Through education and awareness about this new legislation and accompanying tools in the financial sector, court system, and law enforcement agencies, North Carolina has a new mechanism to combat potential crimes against our seniors.

Paige C. Worsham is Senior Policy Counsel with the North Carolina Center for Public Policy Research.


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