Indiana Enacts Senior Consumer Protection Act
by Zachary Pearlstein, Esq.
The state of Indiana has recently expanded The Senior Consumer Protection Act, with revisions that become effective on July 1, 2013. The new provisions simplify and modernize the law, with the goal of protecting senior consumers from financial exploitation from persons who, by deception or intimidation, obtain control over the property or assets of a senior consumer.
Definitions:
Senior consumer is defined as an individual who is at least 60 years of age.
Deception is defined as either misrepresentation or omission of any material fact relating to the terms of a contract or agreement entered into with a senior consumer, or to the existing or preexisting condition of any of the property involved in such a contract or agreement; Or the use or employment of any misrepresentation, false pretense, or false promise in order to induce, encourage, or solicit a senior consumer to enter into a contract of agreement.
Intimidation is defined as conduct or communication by a person directed toward a senior consumer informing or implying that they will be deprived of food and nutrition, shelter, prescribed medication, or medical care and treatment, if they do not comply with the person’s demands.
Financial exploitation occurs when a person knowingly and by deception or intimidation obtains control over the property of a senior consumer or illegally uses the assets or resources of a senior consumer i.e. misappropriation of assets or resources by undue influence, breach of fiduciary duty, fraud, deception, extortion, intimidation, or use of assets or resources contrary to law.
Person is defined broadly as an individual, a corporation, the State of Indiana or its subdivisions or agencies, a business trust, an estate, a trust, a partnership, an association, a nonprofit corporation or organization, a cooperative, or any other legal entity.
A person in a position of trust and confidence is defined as a person, in relation to a senior consumer, who: is a parent, spouse, adult child, or other relative by blood or marriage; a joint tenant or tenant in common; has a legal fiduciary relationship; is a financial planning or investment professional; or is a paid or unpaid caregiver, of the senior consumer.
Defenses:
Civil liability will not be imposed on a person who makes a good faith effort to assist a senior consumer in management of their property, but through no fault of their own is unable to provide such assistance. However, it is not a defense to an action that a person reasonably believed that the victim was not a senior consumer.
Enforcement by a Senior Consumer:
A senior consumer who is a victim of an act described above may bring an action against the person who commits the act. In such an action, the Court may order the person to:
- Return property or assets improperly obtained, controlled or used; and
- Reimburse the senior consumer for any damages incurred or for the value of the property or assets lost as a result of the violation(s)
In addition, the Court may order any of the following:
– For knowing violations committed by a person who is not in the position of trust and confidence:
- Payment of two times the amount of damages incurred or value of property or assets lost; and
- Payment of a civil penalty not exceeding $5,000.
-For knowing violations committed by a person who is in a position of trust and confidence:
- Payment of treble damages; and
- Payment of a civil penalty not exceeding $10,000.
The court may also award reasonable attorney’s fees to a senior consumer that prevails.
Enforcement by the Attorney General:
The attorney general may bring an action to enjoin an alleged commission of financial exploitation of a senior consumer, and may petition the court to freeze the assets of the violator, in an amount equal to (but not greater than) the alleged value of the lost property or assets. Any person who violates the terms of an injunction shall forfeit and pay to the state a civil penalty of not more than $15,000 per violation. In addition to freezing the assets of a violator, the court may also:
-Issue an injunction;
-Order the person to make payment of the money unlawfully received from the senior consumer(s)
- For knowing violations, the amount of such restitution may be increased up to three times the amount of damages incurred or value of property or assets lost.
-Order the person to pay the state the reasonable costs of the attorney general’s investigation and related prosecution;
-Provide for the appointment of a receiver;
-For knowing violations by a person who is not in a position of trust and confidence:
- Order the person to pay a civil penalty of up to $5000 per violation
-For knowing violations by a person who is in a position of trust and confidence:
- Order the person to pay a civil penalty of up to $10,000 per violation
In an action by either a senior consumer or the Attorney General, the court may void or limit the application of contracts or clauses resulting from the financial exploitation.
Finally, the Senior Consumer Protection Act does not limit the rights or remedies that are otherwise available to a senior consumer under any other applicable provision of law.
About the Author:
Zachary is Associate Counsel and Regulatory Compliance Specialist at Bankers Advisory, Inc. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar Association.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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