ST. PAUL, Minn. (KMSP) - A new law went into effect Wednesday that works to protect seniors from suspected fraud against vulnerable clients.
The Safe Seniors Financial Protection Act freezes money while the Department of commerce investigates cases.
“We know that senior financial fraud is a huge problem in Minnesota and needs to be addressed right now,” said Jessica Looman, Minnesota Commerce Commissioner.
This year, preventing elder abuse was a high profile issue and was ultimately part of a vetoed bill. However, the Safe Seniors Financial Protection Act passed on its own and rather under the radar.
“One out of every five Americans over age 65 has been victimized by financial fraud with an annual loss of at least $3 billion,” said Looman.
The new law, in effect now, protects seniors’ retirement savings invested in pensions, funds and 401Ks.
“For those who lose their life savings due to exploitation, they often cannot regain what they’ve lost, reducing their ability to live independently and sometimes causes declining health,” explained Beth McMullen, from the Alzheimers Association of Minnesota and North Dakota.
One of the more common ways seniors’ savings are targeted is when one of their own relatives pillage their accounts. Other ways include con artists on the phone pretending to be love interests, grandchildren or lottery officials.
“We’ve seen several cases where clients do call and they are withdrawing a very sizable portion of their life savings to pay the taxes on this huge, multi-million payout that they know they’re going to receive,” said Deb Marquette, or Thrivent Financial.
The new law allows financial advisors who suspect fraud to contact the Department of Commerce. It gives them the legal right to delay withdrawing funds for 15 days while the case is being investigated.
“It empowers them to report to us,” Looman said. “It allows them to delay a transaction when they have reasonable belief that exploitation is occurring and it gives them immunity.”