Investment advisers and brokers who suspect that elderly clients are the victims of financial abuse can report it to appropriate government agencies without worrying about violating their privacy, according to guidance issued by federal financial agencies Tuesday.
Under the Gramm-Leach-Bliley Act, a financial firm cannot disclose a client's information to a third party without telling the client and giving him or her a chance to decline to release the information.
In a conference call with reporters, federal regulators clarified that notifying local, state or federal officials about suspicions of elderly clients being ripped off is protected under the law.
“Reporting suspected elder financial abuse to the appropriate authorities is typically the right thing to do and generally will not violate the Gramm-Leach Bliley Act,” said Richard Cordray, director of the Consumer Financial Protection Bureau.
The elderly are attractive targets because they often have accumulated assets and sometimes suffer from diminished mental capacity, Mr. Cordray said.
Employees of financial institutions “may be able to spot irregular transactions, abnormal account activity, or unusual behavior that signals financial abuse sooner than anyone else can,” he said. “When seniors fall victim to theft by a trusted family member or a scam, they may be too embarrassed or too frail to pursue legal action — so it is critical that other folks are looking out for them, too.”