Finra Elder Abuse Hotline Fields 7,000 Calls
The hotline set up by Finra last year to prevent and remedy financial abuse of seniors has already resulted in more than $2.6 million in voluntary reimbursements, the Chicago Tribune writes.
The Securities Helpline for Seniors, set up to help seniors understand their account statements and investments, has received more than 7,000 inquiries from callers of all ages, the paper writes.
These calls addressed various investment products, including real estate investment trusts, variable annuities and mutual funds, and included more than 600 referrals to other senior protection agencies such as state, federal or foreign regulators or adult protection services organizations, according to the Tribune.
Finra has found various instances of fraud through the hotline, covering taxes, fake lottery winnings, check scams and binary options — options that pay out a fixed amount or nothing, which the regulator says are often fraudulent, the paper writes.
Studies show people’s mental capacity starts diminishing after they turn 70 and becomes much worse after 85, according to the Tribune. This makes the elderly particularly vulnerable to false promises of high returns, the paper writes. In addition to Finra, the AARP, the Consumer Financial Protection Bureau, the North American Securities Administrators Association and the SEC have departments set up to prevent possible senior financial abuse, according to the Tribune.
One in five Americans over 65 has been a victim of fraud, amounting to $2.9 billion a year, according to one Congressional report released this summer.
Last month, Finra submitted a proposal to the SEC to require financial firms to seek contact information for a trusted person to help prevent financial abuse of seniors.
The proposed rule would also let firms put holds on suspicious disbursements and contact the trusted contact about the transactions.
And this summer, lawmakers enacted legislation granting brokers immunity when they report suspected exploitation, requiring advisors to undergo training in spotting such fraud as well as report it to avoid liability.