How are Vulnerable Adults Protected from Financial Exploitation?
Unfortunately, not everyone has the best interests of vulnerable adults in mind. Whether it’s a family member or a caregiver, the truth is that financial exploitation can be a big issue. So much so, that the Texas legislature just enacted a new law to provide protective measures.
To begin with, it’s critical to understand the meaning of the term vulnerable adult. Adult Protective Services “APS” is part of a Texas state agency and investigates concerns regarding vulnerable adults. This includes both the elderly and adults with disabilities.
According to statistics offered by APS, one in five people have a disability. Additionally, 2.5 million Texas residents fall into the senior category. Their vulnerability seemingly makes them prime candidates for some type of abuse.
Financial exploitation is considered a form of elder abuse when it comes to an aging population. Notably, the Center for Disease Control and Prevention “CDC” delineates financial abuse or exploitation as a part of elder abuse. Their explanation includes the following:
- Illegal, unauthorized, or improper use of an older individual’s resources by a caregiver or other person in a trusting relationship, for the benefit of someone other than the older individual.
- Wrongful use includes, but is not limited to, depriving an older person of rightful access to, information about, or use of, personal benefits, resources, belongings, or assets.
Although this particular definition deals with the elderly, it also applies to adults with disabilities who rely on someone else for assistance. Texas law expands on a similar description of vulnerable adults.
There are a number of actions that could constitute financial abuse. Among them are stealing money and improper use of a power of attorney. An addition to the Texas Code seeks to shield vulnerable adults from the risk of financial exploitation.
Protective Measures Enacted for Vulnerable Adults
Remarkably, H.B. No. 3921 is not an amendment to an existing law. Instead, it creates a new chapter in Subtitle Z, Title 3, of the Texas Finance Code. Why here, instead of the Texas Penal Code if the activity is potentially illegal?
In short, it’s the nature of the new protective measures that makes its placement in the Finance Code ideal. In addition to identifying vulnerable adults and defining financial exploitation, the new legislation places reporting requirements in place.
How’s that? First, financial institutions are now mandated to report suspicious transactions that they believe represent the financial exploitation of vulnerable adults. Additionally, if third parties make allegations to them, the financial institutions are required to assess the situations. In both cases, concerning reports must be submitted to Adult Protective Services.
In addition to financial institutions, securities professionals such as dealers and investment advisors must also report situations they deem suspicious. In all cases, the new legislation requires financial institutions and security professionals to also develop professional guidelines for their employees.
No doubt there may be some confusion when it comes to instituting reporting standards. The exact language of the law says that notice must be provided when there is “cause to believe…or notified that financial exploitation of a vulnerable adult” is an issue.
All of this is obviously subject to interpretation. Moreover, there are other concerns addressed in the law that may bear on your individual situation.
We Want to Help
As the baby boomers age, there are additional concerns about their care. Meanwhile, protection of those will disabilities is also critical. If you are concerned that someone you love is being financially exploited, Manfred Sternberg and Associates can assist you. Additionally, we can also act on your behalf if you are a subject of this type of investigation. Get in touch to discuss your situation!