An elderly woman in Dallas County recently sold her home and wired the $200,000 proceeds to a mysterious bank account, a victims’ advocate said. The “alleged Nigerian” promised to marry her. But it was a scam, and now the woman is homeless.
To thwart these types of scams, a new law signed by Governor Greg Abbott gives financial institutions greater power to stop transactions like the one described above. Under previous Texas law, some banks, credit unions, and securities firms would routinely stop transactions on behalf of elderly or disabled clients, who they suspected were the victims of fraud. But this new law provides financial firms more freedom to do so. In fact, it gives them immunity from litigation when halted transactions turn out to be legitimate or when fraudulent transactions get by undetected.
The bill passed both the Texas House and Senate easily. However, the immunity provision was not pleasing to one conservative lawmaker.
“I do not believe that banks should be held harmless when they unreasonably, or without a sound basis, deny access to a person's money,” said state Rep. Matt Rinaldi, R-Irving, who was one of ten “nay” votes in the Texas House.
But the Texas Bankers Association said it was important for workers in the financial industry to have protection, so they could report perceived fraud to the correct authorities.
The new law also directs financial institutions to set policies that spell out reporting procedures for employees when they suspect an elderly customer may be the victim of fraud.
Despite the new law, advocates say challenges remain. They note that the law doesn’t address the greatest issue concerning the state's role in combating such scammers. The Texas Department of Family and Protective Services only has the authority to investigate financial predation, if a relative of the victim attempts to commit the fraud. When strangers try to con the elderly, the cases are usually referred to the Texas Attorney General’s office or local law enforcement. Victims are less apt to get help there because law enforcement is under no obligation to investigate these crimes.
The new law also says that banks can notify a “third party” who is “reasonably associated with the vulnerable adult” to provide assistance when flagging a potentially fraudulent transaction.
Reference: Texas Tribune (September 19, 2017) “New law aims to help elderly Texans fooled by scammers”