COLUMBIA, Md. — A new Maryland law will allow banks and credit unions to temporarily delay suspicious transactions involving older and vulnerable adults, a measure supporters say could help prevent devastating financial losses from scams.
The law, known as the Vulnerable Adult Banking Protection Act, takes effect Oct. 1 and authorizes financial institutions to place temporary holds on certain transactions involving adults age 65 and older and other vulnerable adults when financial exploitation is suspected. Under the law, holds can last up to 15 business days and, in some cases, 25 business days while a transaction is reviewed, WMAR reported.
The legislation comes as scams targeting older adults continue to result in significant financial losses.
One Person’s Story
One Maryland resident, Judith Boivin of Montgomery County, told WMAR she lost approximately $600,000 after being targeted by scammers posing as law enforcement officials.
Boivin said the fraudsters convinced her she was under investigation for fraud and money laundering and instructed her over a three-month period to liquidate her retirement and savings accounts to prove her innocence.
“The total that I lost was approximately $600,000. And it was the totality of my IRAs and my savings,” Boivin told WMAR.
According to the report, Boivin’s bank suspected she was being scammed but lacked the authority to stop her from withdrawing the funds. “The financial system said this might be a scam, I didn’t believe it. This was the FBI. I was asked to be an asset for a crime case,” Boivin told the station.
Boivin later testified in support of House Bill 1008 and said earlier intervention by her financial institution might have prevented the loss.
What New Law Permits
The new law also permits financial institutions to notify law enforcement and a designated trusted contact when suspicious activity is detected. According to WMAR, supporters say the trusted contact provision is intended to provide an additional safeguard without granting another person access to a customer’s account.
John Bratsakis, president and CEO of the Maryland and D.C. Credit Union Association, told WMAR the law is designed to help financial institutions protect their members from fraud. “That’s what we’re all trying to do is try to find ways to protect our members,” Bratsakis said.
Bratsakis said trusted contacts will not have authority over an account or access to funds.
“They’re not signers on the account. They don’t have access to the money, but it might be someone that somebody trusts that can look out for their interests,” he told the station.
Bratsakis also cited an example involving a local credit union that was able to prevent an $80,000 loss after employees questioned a wire transfer request that appeared suspicious.
Mortgage Transaction Involved
According to WMAR, the transfer involved a mortgage transaction in which funds were directed to an individual rather than a title company. After reviewing the request, the credit union halted the transaction and prevented the loss.
Financial institutions generally are not required to reimburse customers who authorize transactions themselves, even when those transactions are later determined to be part of a scam, WMAR reported. Supporters of the law say that makes early intervention and customer awareness critical tools in combating fraud.
Once the law takes effect, Bratsakis told WMAR that credit unions will begin contacting eligible members about adding trusted contacts to their accounts. New members also will have the option to designate a trusted contact when opening an account.
