Protecting Seniors from Financial Exploitation: Understanding the Senior Safe Act
The Senior Safe Act, signed into law by President Trump, was created to protect older Americans from financial abuse—whether from within their own family or by scam artists preying on vulnerable individuals. Each year, tens of billions of dollars are illegally taken from U.S. seniors, and that staggering total only represents the cases that are actually reported.
The Scope of Elder Financial Abuse
According to the North American Securities Administrators Association, the types of financial exploitation reported break down as follows:
| Issue | Percentage of Cases Reported |
|---|---|
| Third-party abuse or exploitation | 27% |
| Account distributions | 26% |
| Family member, trustee, or power of attorney taking advantage | 23% |
| Diminished capacity | 12% |
| Combined diminished capacity and third-party abuse | 12% |
| Fraud | 6.3% |
| Elder exploitation | 5.7% |
| Friend, housekeeper, or caretaker taking advantage | <1% |
| Excessive withdrawals | <1% |
These numbers reveal a troubling truth: financial exploitation among seniors is widespread and often underreported.
Why Many Seniors Don’t Report Financial Abuse
Many seniors remain silent after being financially exploited—sometimes out of embarrassment, fear of being judged, or worry that others will deem them mentally unfit and take away their independence. Unfortunately, this silence allows abuse to continue unchecked.
To combat this issue, Congress enacted several key protections:
- The Senior Safe Act
- The Elder Abuse Prevention and Prosecution Act (signed in October 2017)
- Two Financial Industry Regulatory Authority (FINRA) rule changes
Together, these measures form a strong legal and financial framework to safeguard older adults.
How the Senior Safe Act and FINRA Rules Work
One of the most impactful FINRA rule changes allows financial institutions to place a temporary hold on disbursement of funds or securities when they have a reasonable belief that a senior is being financially exploited. This pause gives professionals time to investigate and prevent potential losses before assets disappear.
The Senior Safe Act, initially introduced by Representative Bruce Poliquin of Maine, builds on an existing Maine program of the same name. The federal law empowers financial and insurance professionals to report suspected cases of elder financial fraud to their institutions, who can then alert authorities.
Legal Protections for Financial Professionals
As long as financial institutions and their employees act in good faith and have received proper training, they are protected from civil or administrative liability when reporting suspected financial abuse.
The required training involves collaboration among:
- State and federal regulators
- Financial firms and credit unions
- Broker-dealers and insurance agencies
- Investment advisers and legal organizations
This education helps employees recognize red flags and respond appropriately when they suspect financial exploitation.
The Importance of Communication and Awareness
Research shows that seniors who regularly communicate with a trusted financial professional are far less likely to fall victim to scams. Surprisingly, most financial fraud occurs among older adults without cognitive impairment, highlighting that awareness—not mental capacity—is often the key defense.
Still, laws like the Senior Safe Act only work if seniors actively participate and stay engaged with trustworthy financial advisors.
Taking Action: How to Stay Protected
Finding a trained, trustworthy financial advisor or elder law attorney can make all the difference. These professionals can:
- Monitor financial accounts for suspicious activity
- Educate clients about common scams and red flags
- Advise how often to check credit reports
- Review financial statements for errors or misuse
- Help establish safeguards such as trusted contacts or alerts
The laws are in place to protect seniors—but staying proactive is essential.
Get involved in your own financial world.
To learn more about protecting yourself or a loved one from financial exploitation, contact Aging in Maine Law Offices today at (207) 848-5600 or visit our Contact Page to schedule a consultation.
