30
BANKING & FINANCE
September
| 16-22, 2011
pugetsoundbusine
NewNew
law helps
fight exploitation
of vulnerableof
adults
lawbankers
helps bankers
fight exploitation
vulnera
T
he Washington
Washington Department
Department of
he
Social
Health Services
Services
of
Socialand
and Health
received 17,586
reports
of vulnerreceived
17,586
reports
of
vulnerable
adult
in
able adult abuse
in abuse
2010. Twenty2010.
Twenty-six
those
six percent
of thosepercent
reports of
were
about
reports
were about financial exploifinancial exploitation.
tation.
Because it is likely that many cases are
Because itmany
is likely
thatbelieve
many casunreported,
experts
that
es
unreported,
manyadults
experts
betheare
number
of vulnerable
sufferlieve
that the
number could
of vulnerable
ing financial
exploitation
actually be
adults
suffering financial exploitamuch higher.
tion
could
actually
be much
In 2010, the
Washington
Statehigher.
LegislaIn
2010,
the
Washington
ture amended the Vulnerable State
Adult ProLegislature
the Vulnertection Act toamended
give financial
institutions
able
Adult
Protection
to give and
new and better tools forAct
preventing
financial institutions new and better
reporting financial exploitation of “vulnertools for preventing and reporting
able adults.”
financial exploitation of “vulnerable
Under that law, a vulnerable adult is
adults.”
anyone over the age of 60 who is unable to
Under that law, a vulnerable adult
care
for himself
because
a physiis
anyone
overeither
the age
of 60ofwho
calunable
condition
mental
anyone
is
to or
care
for decline,
himselforeither
over
the
age
of
18
who
has
a
developmental
because of a physical condition or
disability,decline,
lives in aor
residential
mental
anyone care
overfacility,
the
or
receives
services
from
a
caregiver
age of 18 who has a developmentalor
caregiving agency.
disability,
lives in a residential care
Financial
is defined
as the
facility,
or exploitation
receives services
from
a
“illegal or improper
use of agency.
the property,
caregiver
or caregiving
income,
resources
or trust isfunds
of the
Financial
exploitation
defined
vulnerable
adultorbyimproper
any person
as
the “illegal
usefor
of any
person’s
profit income,
or advantage
other than
the
property,
resources
or
trust
funds ofadult’s
the vulnerable
adult
the vulnerable
profit or advantage.”
by
anyexploitation
person forcan
any include
person’s
profit
Such
theft
of
or
advantage
other
than the
vulnerincome
or assets,
or making
a vulnerable
able
’s profit
or advantage.”
adult adult
the victim
of financial
scams.
Such
exploitation
cancustomer
include contact
theft
Because
of regular
of
or assets,
making
a
andincome
familiarity
with or
their
customers’
vulnerable
adult the
victim of
accounts, financial
institutions
arefinanoften
cial
well scams.
situated to detect behavior changes
Because
regular customer
conand
assist inofprotecting
their vulnerable
adult customers.
The new amendments give financial
institutions the right to refuse transactions
requiring disbursal of funds if the financial
institution “reasonably believes that financial exploitation of a vulnerable adult may
have occurred, may have been attempted,
or is being attempted ....”
Financial
institutact
and familiartionswith
may their
also refuse
ity
custo disburse
funds if
tomers’
accounts,
financial
they receiveinstituinformations
are the
often
tion from
DSHS
well
situated
to
or from
law enforcedetect
behavior
ment that financial
changes
exploitationand
of aasvulsist
in protecting
nerable
adult may
gail
their
vulnerable
have occurred,
may
mautner
adult
customers.
have been
attemptamended,The
or new
is being
atments
give
tempted. In allfinancases,
cial
institutions
the decision
wheththe
right
refuse
er or not totodisburse
transactions refunds is discretionquiring disbursal
ary with the financial
of funds if the fiinstitution.
janis
nancial institution
While the statute
White
“reasonably
bedoes
notthat
require
that
lieves
finaninstitutions
cial exploitation of financial
a vulnerable
adult
report
or take
action upon
suspicion
may have
occurred,
may have
beenof
financial
exploitation
of
vulnerable
adults,
attempted, or is being attempted
....”
it certainly
encourages
them
to
do
so by
Financial institutions may also
providing
discretionary
good-faith
refuse toadisburse
funds
if they stanredard
the institution’s
decision.
ceiveforinformation
from
the DSHS or
To protect
financial institutions
from
from
law enforcement
that financial
claims
that they
withheld
exploitation
of wrongfully
a vulnerable
adultdisbursal
of funds
or wrongfully
frozebeen
transmay have
occurred,
may have
actions,
the Vulnerable
Protection
attempted,
or is beingAdult
attempted.
In
all cases,
decision
whether
or
Act,
known the
as VAPA,
provides
that banks
not to
disburse
funds
discretionand
their
employees
areisimmune
from
ary withcivil
the and
financial
institution.
criminal,
administrative
liability
W hile
the statute
notorrequire
if the
determination
of does
whether
not to
that financial
institutions
report
disburse
funds was
made in good
faith.
orVAPA
takealso
action
uponthe
suspicion
of
requires
financial institufinancial
exploitation
of effort
vulnerable
tion
to make
a reasonable
to give
adults,
it certainly
encourages
them
oral
or written
notice to
all parties authoto
do
so
by
providing
a
discretionrized to transact business on the account
LEGAL
PERSPECTIVES
when it refuses a transaction, as well as to
report the incident to the Adult Protective
Services Division of DSHS and local law
enforcement.
Any refusal by the financial institution to
disburse funds is also limited in time — 10
days if the transaction involves the sale of
a security and five days if it does not. The
time
however,
may be extended
by a
ary limit,
good-faith
standard
for the insticourt
order.
tution’s
decision.
The
amendments
now require
To new
protect
financialalso
institutions
from claims
that they
wrong-training
financial
institutions
to provide
disbursal
of funds
tofully
theirwithheld
employees
to recognize
financial
or wrongfully
froze transactions,
exploitation
of vulnerable
adults.
the
Adult
Protection
TheVulnerable
institution can
develop
its own trainAct,materials
known as
that
ing
or VA
usePA,
twoprovides
presentations
banks and
employees
areAttorimdeveloped
by their
the Washington
State
mune
from Office.
criminal, civil and adney
General’s
ministrative
liability
if the to
determiOne presentation
is designed
be used
nation
of
whether
or
not
to
disburse
for supervising employees and the
other
was made in good
faith.
isfunds
for non-supervisory
staffers.
The trainPA alsoforrequires
the financial
ing VA
materials
supervisory
employees
institution
to
make
a
reasonable
efinclude the following topics: Who are
fort to give oral or written notice
Vulnerable Adults, What Factors Make
to all parties authorized to transact
VAs Vulnerable, How the Law Determines
business on the account when it
Financial Exploitation, Indicators of
refuses a transaction, as well as to
Financial Exploitation, Reporting Susreport the incident to the Adult Propected
Exploitation,
Legal
tectiveFinancial
Services
Division ofand
DSHS
Remedies
Institutions Can
and localthat
lawFinancial
enforcement.
Pursue.
A ny refusal by the financial instiThere to
aredisburse
also video clips
available
the
tution
funds
is alsoonlimAttorney
General’s
website
illustrating
comited in time — 10 days if the transmon
scenarios
of financial
exploitation.
action
involves
the sale
of a security
There
no if
cases
to date
and
fiveare
days
it does
not.that
Theapply
time
the
newhowever,
VAPA amendments,
but financial
limit,
may be extended
by
institutions
should be prepared to make
a court order.
discretionary
decisions, utilizing
their
The new amendments
also now
new
authority
to refuse
disbursalstowhen
require
financial
institutions
provide “reasonably
training to believe
their employees
to
they
that financial
recognizeoffinancial
exploitation
of
exploitation
a vulnerable
adult may have
vulnerable
occurred,
mayadults.
have been attempted, or is
The
institution
being attempted ....” can develop its
own
training
materials
or use
twoto
Developing
policy
guidelines
for staff
presentations
developed
follow
and making
sure that by
all the
required
Washington
Attorney
staff
receive theState
training
required Genby VAPA
eral’s
Office.
will certainly assist financial institutions in
One those
presentation
is designed
to
making
determinations
and demonstrating their “good faith” in doing so.
Gail Mautner and Janis White are
shareholders with Lane Powell in Seattle.
Mautner can be reached at 206.223.7099
or at mautnerg@lanepowell.com. White can
be reached at 206.223.7031 or at whitej@
lanepowell.com.
Reprinted for web use with permission from the Puget Sound Business Journal. ©2011, all rights reserved. Reprinted by Scoop ReprintSource 1-800-767-3263.
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