The Financial Industry Regulatory Authority (FINRA) has brought in new measures to protect elderly US citizens online.
According to the Financial Times, the new regulation “requires members to make reasonable efforts to obtain a name and contact information for a trusted contact person on a vulnerable customer’s account.”
It also gives member firms the authority to freeze funds or securities if they believe a given transaction may be financially exploitative.
“The rules provide firms with additional tools to combat senior financial abuse, particularly in situations where someone outside of the securities industry is committing the abuse,” says FINRA.
Part of the motivation for the change in policy is the ageing of the US population. As financial institutions move towards serving an older demographic, their practices are having to adapt to the needs of those with dementia or Alzheimer’s.
Joseph Borg, president of the North American Securities Administrators Association (NASAA), says the elderly are particularly vulnerable to online dating scams.
FINRA is also working to try and prevent intra-family and carer perpetrators from taking advantage of elderly savers.
The move comes as the US begins to take a stronger stance on fraud in general. Over the Valentine’s period, the FBI warned against romance scams.
Western Union has been forced to repay customers who were scammed via its transaction services.
Read more here.