Your parent picks up the phone, and on the other end is someone claiming to be a government agent, a few hours later, their brokerage account is being emptied.<\/p>\n
Read more Why ACA Health Costs Keep Rising<\/a><\/p>\n The mutual fund<\/a> company sees the warning signs but, unlike broker-dealers already covered by FINRA rules, currently lacks federal authority to freeze the withdrawal before the money vanishes.<\/p>\n The U.S. House of Representatives passed the Financial Exploitation Prevention Act<\/a> on June 25 by a vote of 414 to 2, giving mutual funds and exchange-traded funds the power to temporarily freeze suspicious redemptions targeting older Americans.<\/p>\n The legislation now moves to the Senate, where a companion bill is pending in the Banking Committee. If signed into law, the measure would create the first federal framework that lets investment companies intervene before scam proceeds leave a client’s account.<\/p>\n The Financial Exploitation Prevention Act<\/a> amends the Investment Company Act of 1940 to authorize open-end investment companies and their transfer agents to delay a redemption request. <\/p>\n The hold kicks in when a firm reasonably believes the transaction involves financial exploitation of a person aged 65 or older, or an adult with a mental or physical impairment that limits their ability to safeguard their own interests, according to CNBC<\/a>.<\/p>\n Firms can pause a suspicious withdrawal for up to 15 business days under the bill’s framework, and the hold can stretch by an additional 10 business days if investigators confirm exploitation. <\/p>\n That brings the maximum delay to 25 business days without a court order, though state regulators or a court can authorize holds beyond that window.<\/p>\n Scams targeting adults aged 60 and older cost $2.4 billion in 2024, a 300% jump from $600 million in 2020, according to the FTC’s annual report to Congress.<\/a><\/p>\n Americans aged 60 and older filed 201,266 cybercrime complaints in 2025 and reported $7.7 billion in losses, a 59% increase from the prior year, according to the FBI’s 2025 Internet Crime Complaint Center annual report<\/a>.<\/p>\n The average loss per victim reached $38,500, and more than 12,400 seniors lost more than $100,000 each, the FBI reported.<\/p>\n Investment fraud inflicted the heaviest financial toll on older adults, with $3.52 billion in reported losses tied to fake trading platforms and cryptocurrency schemes.<\/p>\n Jeff Carpenter<\/a>, CEO of Weokie Federal Credit Union in Oklahoma City, warned that scammers rely on creating a sense of urgency to push victims into moving money quickly.<\/p>\n Whenever there’s a sense of urgency \u2026 you have to pause\u2026Pausing is the most important thing. If they can create a sense of urgency and get you to move the money quickly<\/p>\n Artificial intelligence<\/a> has added a new dimension to the threat facing older investors across the country. The FBI received more than 3,100 complaints from seniors referencing AI-powered scams in 2025, with losses exceeding $352 million, the report indicated.<\/p>\n Read more Tesla’s $1.4 trillion valuation rests on what happens next in one city<\/a><\/p>\n Total internet crime losses across all age groups climbed to $20.9 billion last year, representing a 26% increase over 2024, the FBI noted<\/a>. Adults over 60 bore the largest share of those losses by age group.<\/p>\n Halfpoint Images\/Getty Images<\/a><\/p>\n Rep. Ann Wagner, a Republican from Missouri who chairs the House Financial Services Committee Subcommittee on Capital Markets, sponsored the legislation alongside Rep. Josh Gottheimer, a Democrat from New Jersey. <\/p>\n “Financial advisors are often on the front lines of detecting suspicious activity and helping protect clients from fraud and exploitation,” Dale Brown<\/a>, president and chief executive of the Financial Services Institute, said in a statement. <\/p>\n “This bill would equip mutual funds with tools to better help protect vulnerable investors, while ensuring appropriate safeguards are in place,” Brown said.<\/p>\n The Investment Company Institute, a trade group representing asset managers, also backed the measure. <\/p>\n More Personal finance:<\/strong><\/p>\n “1 in 5 Americans over the age of 65 has been a victim of financial exploitation, experiencing estimated losses of $2.9 billion,” Eric J. Pan<\/a>, president and chief executive of the Investment Company Institute, said in a statement urging Senate passage.<\/p>\n Providing time to investigate suspected exploitation “can make the difference between protecting a victim’s retirement savings<\/a> and losing those assets forever,” IRI Chief Government and Political Affairs Officer Paul Richman and Director of Government and Political Affairs John B. Jennings wrote in a June 15 letter to Wagner and Gottheimer, as reported by Financial Planning<\/a>.<\/p>\n For the millions of Americans with parents or grandparents managing their own investment accounts<\/a>, this legislation introduces a concrete safeguard that did not previously exist at the federal level. <\/p>\n Financial advisors have long been able to spot suspicious patterns in client accounts, but the lack of legal authority to pause transactions left many unable to act as funds vanished.<\/p>\n “As a registered investment advisor, I view H.R. 2478 as an important step in strengthening my ability to protect clients from financial exploitation while respecting their financial independence,” Joni Alt<\/a>, senior wealth advisor at Evermay Wealth Management, told Wealth Management.<\/p>\n The bill passed the House once before, clearing the chamber 419-0<\/a> in 2023, but the Senate never voted on it. Whether the upper chamber acts this session remains unclear, though surging senior fraud losses add political pressure to move forward. <\/p>\n If the Senate passes the measure, investment firms nationwide would gain standardized federal authority to intervene when they suspect a client is being targeted by scammers. <\/p>\n For families with aging relatives, that authority could mean the difference between catching a fraud in progress and discovering it after the money is gone.<\/p>\n