LOS ANGELES : Bill to Protect Elderly From Fraud Backed

In a move to protect seniors from fraud, the Los Angeles City Council has announced support for proposed state legislation allowing banks to refuse service to elderly customers suspected to be disoriented, mentally impaired or influenced by con artists.

Councilman Joel Wachs urged the council to support the legislation, titled the Elderly and Dependent Adult Depositor Protection Act, which was introduced in February. Tuesday, the council voted in favor of Wachs’ motion. The bill also is supported by the Los Angeles Police Department’s elder person estate unit, part of the bunko-forgery division.

If adopted, the legislation would allow financial institutions to legally refuse to pay a check, draft or order for withdrawal from an account if the bank believes an elderly person “lacked the capacity to enter into a contract” at the time of the transaction, or if the bank believes an elderly person has been pressured or tricked into withdrawing funds for someone else.

Under the legislation, if a bank refuses service it must report the case to a local adult protective services agency and to police.

The bill also requires that if the bank refuses service for more than 14 consecutive days, it would be required to file a petition to determine whether the person had the capacity to enter a contract during the time in question. In the petition, the bank would be required to report “any confused, unusual or bizarre behavior” on the part of the account holder.

“Often, the bank is the only party that knows a person is doing something very atypical,” such as suddenly withdrawing large sums of money, said Susan Aziz, a consultant to the Fiduciary Abuse Specialist Team, a joint Los Angeles city and county elder abuse prevention program.

According to Aziz, if the legislation is adopted, it would give bank officials greater latitude to make inquiries “if the person appears to have diminished capacity, or if someone is standing next to them (the elderly person), talking to them,” seeming to instruct the person to withdraw money.

Marilyn Fried, executive director of Organization for the Needs of the Elderly in Van Nuys, said the intent of the bill is good, but she questioned how the competency of seniors would be determined.

“Sometimes, people confuse difficulty in hearing or seeing with mental disability,” she said. “I’d hate to have somebody who was mentally intact have problems” at banks.

Officials said investigations would be conducted by the county’s adult protective services agency and/or by police.

Bank managers welcome the proposed legislation because it would give them power to protect their older clients from scams and cons. One official at a bank in Studio City, who would not give her name, said she once reported a case of suspected fraud to the authorities.

“I’m not sure who it was, but they investigated and had the whole thing settled within five days,” the manager said. “It’s a fine line determining who’s being abused and who’s not able to make good decisions. But we can get sued if we don’t help someone. If the legislation changes that, it definitely would be beneficial.”