A new law seeks to protect older and disabled adults in North Carolina from financial abuse. Beginning on December 1, 2013, all financial institutions are encouraged, but not required, to offer disabled adult and older adult customers the opportunity to submit, and periodically update, a list of persons that the disabled adult or older adult customer would like the financial institution to contact in case of suspected financial exploitation of the disabled adult or older adult customer.
This list can provide protection for persons who do not wish to give up control of their accounts (i.e., appoint an attorney in fact), but who would be willing to name a person or persons (e.g., family, trusted friends or advisors) who would be alerted if the financial institution suspects financial exploitation.
A financial institution with a list of contacts must notify all of the individuals on the list if the institution suspects financial exploitation. The Act requires “[a]ny financial institution, or officer or employee thereof, having reasonable cause to believe that a disabled adult or older adult is the victim or target of financial exploitation” to make certain reports. “Reasonable cause” is a relatively low bar that suggests a reasonable opinion of the facts that support some sort of exploitation. To encourage such reporting, the Act provides that anyone who acts in good faith in reporting the suspected exploitation may not be held liable if no exploitation is found.
An important aspect of this reporting is that the financial institution does not have to wait for actual exploitation to occur before a report can be filed. The language “victim or target” allows the financial institution to report suspected activity before the damage occurs.
The Act defines financial exploitation as “the illegal or improper use of a disabled adult's or older adult's financial resources for another's profit or pecuniary advantage.” The inclusion of “improper” indicates that a report can be filed based on conduct that is not necessarily illegal. Financial institutions and their employees will have to determine whether conduct is sufficiently “improper” to warrant a report in these circumstances.
This revised Act provides a valuable tool for the protection of older and disabled adults against financial exploitation. Financial institutions should be encouraged to accept such lists of contacts from their older and disabled customers to help protect these citizens from a growing problem.
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