Lawmakers in the House of Representatives have passed the Financial Exploitation Prevention Act of 2025 (H.R. 2478) with a 414-2 vote. This legislation empowers mutual funds and exchange-traded fund transfer agents to temporarily halt redemption requests from seniors or individuals with disabilities when financial exploitation is suspected.
The bill introduces a 15-day delay for suspected fraud cases, extendable to 25 days if confirmed, with court or regulatory approval allowing further extensions. It also mandates the SEC to submit a compliance report to Congress within a year, outlining strategies to curb fraud targeting vulnerable adults.
Experts emphasize common red flags, such as urgent requests or instructions to keep transactions secret. Financial institutions are encouraged to implement “trusted contact” protocols, though participation remains voluntary. The measure addresses rising fraud losses, with older adults reporting $2.4 billion in scams in 2024—up 58% from 2023.
Though investment scams accounted for 68% of total losses, unreported cases suggest actual damages could reach $81.5 billion. The bill builds on prior efforts, which passed the House unanimously in 2023 but stalled in the Senate.
Proactive measures, like verifying unexpected requests and consulting trusted contacts, are highlighted as critical defenses against modern fraud tactics.”
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