With the passing of a new state law, Texas banks are among the financial institutions that can now shut down transactions, if they suspect a scammer has targeted a vulnerable client.
This is a sad story and a hard lesson for an elderly Texas woman who was fleeced by a man who claimed to be from Nigeria. Based on his representation of love and a promise to marry, she sold her home and sent $200,000 to his bank account. She is now homeless, and he has vanished.
As The Texas Tribune explains, in “New law aims to help elderly Texans fooled by scammers,” cases like this happen all the time.
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 even 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.
However, 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.
Another part of the new law gives banks the right to be in touch with a “third party” who is “reasonably” known to an adult who has been deemed to be vulnerable, if a transaction appears to be fraudulent. The law is very new, so it remains to be seen whether or not advocacy groups will be included in the “third party” category.
Reference: Texas Tribune (September 19, 2017) “New law aims to help elderly Texans fooled by scammers”