SAN DIEGO (KGTV) — Proposed legislation focused on protecting the elderly from wire transfer scams has passed a crucial step.
SB 278 now heads to the Senate floor after passing the Senate Judiciary Committee in a 10-1 vote.
The bill would clarify that if financial institutions “assist in financial elder abuse—either knowingly or otherwise—they can be held liable,” according to the bill’s author state Senator Bill Dodd.
Team 10 has been following the stories of multiple seniors who have lost their life savings in online wire transfer scams.
Last year, Eden and Mark lost their life savings.
“We lost all the money we made in our business. All of the monies we saved together for 38 years we've been married and it was all taken from us,” said Eden, who only wanted to use her first name for privacy concerns.
She said back in October, she got a pop-up notice about a virus on her computer and had to call Microsoft. When she called the number, she was told that there was a “terrible problem” on her computer.
“It’s connected to identity theft,” Eden recalled the man on the phone telling her. “It looks like there are people with criminal background trying to get into all of my bank accounts.”
While the story may sound unbelievable, Eden said the person on the phone sounded convincing. At the time, she thought she was going to lose access to her accounts. She thought she was talking to Microsoft, but it turned out to be a scammer. The scammer said he was going to connect her to a government official, whom Eden found out later was also a scammer.
That person told her to transfer her money to another account to protect it. “I want you to transfer it to Hong Kong,” Eden remembers he told her. “That's where we keep our government safe accounts.”
He tricked Eden into believing her family's safety was at risk if she didn't follow all the instructions.
“Before I left the house, I was to check in with him. When I got to the bank, I was to check in with him and when I left the bank after the transfer, I was to check in with him,” she said.
She made five wire transfers to the scammer, totaling about $564,000.
Eden said she was instructed not to say anything to anyone—including her husband—for her safety. She claimed the bank did not ask her any follow-up questions.
“Chase played a major role,” Eden told Team 10. “The fact that their own wire department just did not ask me any questions, I think is unconscionable.”
A Chase spokesperson disputes her version of events, saying Eden was warned and signed a disclaimer that said, “Be aware of wire scams.” Peter Kelley said bank staff explains the wire transfer document to all customers to ensure they understand different types of scams.
Despite that, what Eden’s husband Mark cannot comprehend is Chase used to follow up with them on other financial matters. When it came to these transfers, they did not.
“We were private clients with Chase. We used to get calls, sometimes maybe even a little bit annoying,” her husband, Mark said. “We knew them personally, checking in with us. For the life of me, with five suspicious transfers of money, why they couldn't pick up the phone, I'll never understand that.”
Gladys Smith lost $50,000 in a wire transfer scam two years ago. She said the scammer told her to tell Chase bank employees, the money was going to her brother-in-law in Hong Kong. When she went to Chase bank, Gladys could not remember who the transfer was going to.
“They said, ‘Oh, we’re still missing one thing. What’s the name that it goes to? We don’t have a name,’” Smith told Team 10. “I wasn’t thinking that quick anymore.”
Her attorney, Bob Steele, said Smith has never done a wire transfer in her life. She had been with Chase for decades.
“They’re looking at this wire transfer that doesn't even have a name associated to it. There's not even a contact person,” Steele said. “Every red flag that it could possibly have been raised that this elder was being scammed was presented to Chase bank and what did they do? They did nothing.”
All the seniors who spoke to Team 10 are advocating for SB 278. It would clarify victims of financial elder abuse "can continue to hold institutions accountable when they should have known of the fraud but negligently assisted in the transfer anyway."
Numerous financial institutions are against the proposal and voiced their concerns during recent Senate committee hearings.
The California Bankers Association told Team 10 in April, "Financial institutions... will be forced to make very conservative decisions about transactions initiated by seniors, and this may lead to processing delays."
Kelley said documents warning of scams, which Eden signed, have been in use since June 2022. He confirmed the documents were not available when Smith lost her life savings, but said, "Consumers should act with caution when someone asks them to urgently send money.”
Steele said what banks are doing is not enough. “They're at that point in their life where they're starting to lose a little bit physically. They're starting to lose a little bit mentally. These are the people we should be protecting and we’re not. We're not protecting the most vulnerable people in our society and that's depressing, heartbreaking,” Steele said. “We're doing everything we can to try to change that.”
After the story aired, a Chase spokesperson reached out to Team 10 regarding Eden and Mark's statements. "Scammers will often coach their victims to say certain things to avoid suspicion," Peter Kelley wrote to Team 10 on May 5. "We confirmed on multiple occasions—both in person and over the phone—our customer wanted to send the wires for a business transaction involving her son-in-law. To raise her awareness, we also reminded her of various scam scenarios."
Chase has declined an on-camera interview.
To get in touch with our Team 10 investigators, email: Team10@10News.com.