Financial abuse of an elder or dependent adult: fraudulent transactions: liability.

Plain English Breakdown

The bill summary does not provide details on the exact process for elders and dependent adults to sue non-compliant banks or specify how banks will investigate claims of financial abuse.

Financial Abuse of Elders and Dependent Adults: Fraudulent Transactions

This law increases penalties for not reporting financial abuse of elders or dependent adults, limits their liability in fraudulent transactions, and requires banks to investigate claims of such abuse.

What This Bill Does

• Increases the fines for financial institutions that do not report suspected cases of elder or dependent adult financial abuse from $1,000 to $10,000, and from $5,000 to $50,000 if it is willful.
• Limits how much an elder or dependent adult who was tricked into a fraudulent transaction has to pay back. They only have to pay the lesser of $50 or what they were tricked out of before the bank knew about it.
• Requires banks to look into claims from elders and dependent adults if they think their money was taken in a scam within 10 business days after receiving notice.

Who It Names or Affects

• Elders and dependent adults who might be victims of financial scams or abuse.
• Financial institutions like banks that deal with elder or dependent adult accounts.
• People working at financial institutions who need to report suspected cases of financial abuse.

Terms To Know

Injured consumer

An elder or dependent adult who has lost money due to a fraudulent transaction.

Civil penalty

A fine imposed by the government for breaking certain laws.

Limits and Unknowns

• The bill does not specify how banks will investigate claims of financial abuse.
• It is unclear what happens if a bank fails to properly investigate or respond to a claim within the required timeframe.
• The exact process for elders and dependent adults to sue non-compliant banks is not detailed.

Official Summary Text

AB 909, as amended, Schiavo.
Financial abuse of an elder or dependent
adult: mandated reporters.
adult: fraudulent transactions: liability.
Existing law, the Uniform Commercial Code (UCC), provides that, unless displaced by the particular provisions of the UCC, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement the UCC.
Existing law generally regulates fund transfers, including by prescribing rules applicable to a transfer pursuant to a security procedure for the detection of error to a beneficiary not intended by the sender.
This bill would
similarly specify that those fund transfer provisions do not displace those principles of law and equity.
Existing law requires all officers and employees of a financial institution to report known or suspected instances of financial abuse of an elder or dependent adult, as specified.
Existing law imposes a civil penalty for violation of this prohibition in an amount not exceeding $1,000 or, if the failure to report is willful, a civil penalty not exceeding $5,000, as specified.
This bill would
make nonsubstantive changes to those provisions.
increase those civil penalties to $10,000 and $50,000, respectively, and would additionally authorize an elder or dependent adult who suffers financial abuse because of the noncompliance to recover those civil penalties.
This bill would also enact various provisions related to protecting a victim of abuse of an elder or dependent adult with respect to a fraudulently induced transaction, defined as an “injured consumer,” including by limiting the liability of an injured consumer for a fraudulently induced transaction to the lesser of $50 or the amount of money or value of property or services obtained in the fraudulently induced transaction before the financial institution has notice that, or a reasonable basis to believe that, a fraudulently induced transaction involving the injured consumer’s account has been, or may be, effected, as prescribed.
This bill would also require a financial institution that, within 60 days of transmitting to a consumer certain required documentation related to the consumer’s account, receives oral or written notice in which the consumer, among other things, indicates the consumer’s belief that the consumer is an injured consumer, to investigate, as prescribed, the alleged reasons and determine whether the consumer is an injured consumer within 10 business days. This bill would authorize an injured consumer to bring a civil action against a noncompliant financial institution, as prescribed.

Current Bill Text

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