The Office of the Attorney General presented testimony last week to a joint hearing of the Pennsylvania Senate Committees on Banking and Insurance and Aging and Youth, advocating for House Bill 2064, which would enable banks and other financial institutions to offer greater protections to older Pennsylvanians who often are targets of cyber fraud.
Director of the Bureau of Consumer Protection and Chief Deputy Attorney General John Abel and Assistant Chief Deputy Attorney General Nicholas Smyth testified about cyber fraud specifically against seniors, but emphasized that all Pennsylvanians would benefit greatly from the proposed legislation, which would incentivize financial institutions to block suspicious wire transfer transactions and therefore cut the cyber criminals off from accounts directly at the source.
“We have come across far too many heartbreaking stories of older Pennsylvanians who were manipulated and defrauded out of their life savings, and, oftentimes, we are limited in our ability and authority to recoup the lost money,” Attorney General Henry said. “Our Office supports this bill and encourages banks and financial institutions to be proactive when our most vulnerable residents become the targets of fraudsters.”
The Office of Attorney General estimates that criminals stole between $260 million to $2.1 billion from Pennsylvanians over 60 in 2022. Comparitech, a technology research company, estimates that criminals have stolen $1.63 billion from more than 28,000 Pennsylvania Seniors in the 2022-2023 financial year – a 26% annual increase in the number of victims. This averages out to about $58,000 per crime victim over 60. The billions of dollars being stolen each year are dollars that Pennsylvanians would otherwise invest in their communities by buying or fixing up their home, starting a business, or retiring.
House Bill 2064 would provide banks and financial institutions with the tools they need to stop financial fraud related in its tracks, Smyth testified. The bill would require financial institutions to report any suspected elder financial exploitation. Additionally, it enables and encourages financial institutions to place a hold on a transaction if they suspect elder financial exploitation.
The bill’s liability provision incentivizes banks to stop fraud because they would be accountable to reimburse customers for any major losses. Under this liability provision, banks would be liable for an older adult’s financial losses due to financial exploitation only if all four of the following hurdles are met:
- Designated representative (a specifically trained person at the bank) knew or had reasonable cause to believe that the older adult was subject to past, current, or attempted financial exploitation;
- Despite such knowledge or reasonable cause to believe, the designated representative failed to place a hold on a proposed transaction;
- Within 60 days after such a failure to place a hold, at least $10,000 in total was stolen from the older adult’s account over a period of 31 days or less; and
- Within 180 days of the last wire transfer, the financial institution was notified in writing, under penalty of perjury, that the transfer was a result of financial exploitation.
The Office of Attorney General is grateful to the four courageous survivors of financial exploitation who permitted the Office of Attorney General to include their stories in the testimony. Two of the survivors, Bill Hoffman of Lebanon and Scott Zeiders of Harrisburg, attended the testimony. Detective Jordan Smith of the Lower Heidelberg Township Police Department attended as well, and his persistence in stopping a fraud perpetrated against a Reading woman is featured in the testimony.
Original source can be found here.