A relative of Rep. Lezlye Zupkus fell victim to an all-too-familiar scam a few years ago: fraudsters claimed to have kidnapped the woman’s grandchild and demanded money.
Zupkus, R-Prospect, told an audience at the Elim Park senior living center in Cheshire on Thursday that her relative went to the bank to withdraw $100,000, but was fortunate the bank teller became suspicious. Bank employees called family members who were able to intervene before the money was gone.
Lawmakers are hoping a new law will prevent seniors from falling victim of similar scams in the future.
The law, which takes effect next July, will allow banks, credit unions, advisors and other financial institutions to temporarily hold transactions when they suspect fraud is occuring.
“This is all real, you know it’s real, it happens,” Zupkus said during a bill signing ceremony at the independent senior living center.
Financial institutions will be allowed to hold or suspend transactions for up to 45 days when they suspect fraud under the law. They then notify the Departments of Banking or Social Services, allowing regulators to investigate.
The law also protects banks and credit unions, who already have the power to unilaterally block suspicious transactions, from liability for damages that could occur from the hold. The law applies to accounts held by state residents who are at least 60 years old.
Banking Commissioner Jorge Perez said it can be hard to help residents recover money once they hand it over to a fraudster.
“To be honest, most of the time, no matter how hard we work, by the time we get involved, the money is gone,” he said.
Those fraud attempts are becoming even more sophisticated. Perez said artificial intelligence can help deceive victims by spoofing the voice of a loved one.
The Banking Department will provide training for investment brokers, advisors and other covered employees to spot potential fraud. Perez told the audience that training will focus on how to spot irregularities for each individual account holder.
“We want to make sure you have access to your money for legitimate purposes but when it’s not normal, … that’s when the red flags will go off,” he said.
Residents of Elim Park shared their own stories of fraud attempts and said they’re happy the state is putting protections in place.
“I think it’s a blueprint for what can happen in Washington,” David MacNeill, a former Elim Park CEO, said, expressing hope that Congress will take similar action.
John Erlingheuser, senior associate director of advocacy and outreach for AARP, said he and other advocates spent five years pushing lawmakers to adopt this bill. Seniors account for 12 percent of Connecticut’s population, but are victims in 30 percent of cases involving these types of fraud, Erlingheuser said.
“People have no idea how bad this is,” he said.
The FBI, alone, received 88,262 complaints of elder fraud from victims 60 and older reporting losses totaling $3.1 billion.
Gov. Ned Lamont told the audience about his own experiences with fraud attempts, including one person claiming to call his wife, Annie, about her unemployment benefits. Annie Lamont is co-founder and managing partner of Oak Hill HC/FT, a venture capital fund.
“There’s a lot of Willie Suttons out there,” Lamont said, referencing the famous bank robber who operated in the 1920s.
The law also reinforces state and federal protections for consumers, including stipulating that banks and other financial institutions first need account holders to agree to receive periodic statements in electronic format before halting mailed documents.
Institutions also have to allow consumers to request paper documents or withdraw their consent to electronic records at any time.