Additional Coverage:
- Bill that would help protect California seniors from scammers waits for Gov. Newsom’s signature (newsbreak.com)
California Bill Targets Financial Elder Abuse
Under federal law, credit card companies bear the burden of fraud losses. However, large banks face no penalties when elderly victims wire substantial funds to scammers. California lawmakers have passed a bill that aims to address this issue.
The bill, Senate Bill 276, was inspired by the story of Alice Lynn, a widow who lost her life savings in a cryptocurrency scam. Lynn alleges that her bank failed to recognize red flags and prevent the fraudulent transactions.
In response, the bill requires banks to establish emergency contact programs for elderly account holders and dependent adults. If the bank suspects elder fraud or abuse, the contact would need to approve any significant transfers.
The bill also authorizes banks to delay transactions over $5,000 for three business days to investigate potential fraud.
Initially opposed by the banking industry due to concerns about liability and customer convenience, the bill was amended to address these concerns. The industry has since withdrawn its opposition.
However, legal experts warn that the bill may face challenges from federally chartered banks, which are protected from certain state regulations. If challenged, the California law may not be enforceable against these banks.
Despite this potential setback, the bill’s supporters believe it could spark a broader conversation about the need for federal legislation to protect seniors from financial abuse. Governor Newsom has until Monday to sign the bill into law.