Georgia’s new bank scam law allows financial institutions to pause suspicious transactions involving adults aged 65 and older, providing a crucial safeguard against financial exploitation.
Georgia has implemented a new law aimed at protecting vulnerable adults from financial scams. The legislation, known as House Bill 945, took effect on July 1, 2026, and empowers banks and credit unions to pause transactions that they reasonably suspect may involve financial exploitation targeting individuals aged 65 and older, as well as those with qualifying physical or mental incapacities, including Alzheimer’s disease or dementia.
The law addresses a growing concern over scams that pressure individuals into making hasty financial decisions. For instance, a common tactic involves scammers calling victims and falsely claiming that their bank accounts are under threat, urging them to transfer funds to a “safe account” that ultimately belongs to the scammer. This law provides financial institutions with the option to intervene before such irreversible transfers occur.
Under the new law, financial institutions can place a hold on transactions linked to suspected exploitation. This includes not only the accounts of eligible adults but also accounts where they are beneficiaries, and even accounts belonging to suspected perpetrators of exploitation. This provision expands the law’s reach, allowing institutions to act when suspicious funds appear in another customer’s account.
However, the law does not mandate that banks must place a hold on every suspicious transaction. Instead, it grants them discretion, meaning that a teller or fraud analyst must recognize warning signs and take action. The law specifically targets transactions that raise suspicion, rather than automatically freezing all payments or withdrawals associated with an account.
Initially, a hold placed under this law lasts for 15 business days, with the possibility of extending it for an additional 15 days if the institution’s review continues to indicate a concern for exploitation. A court may also intervene to shorten or extend this period. Banks are required to notify authorized account parties and any trusted contacts within three business days, although they may skip notifying individuals suspected of being involved in the exploitation.
To effectively utilize this power, financial institutions must train their employees and establish written procedures for reviewing suspected exploitation cases. The law also provides liability protection for institutions that act in good faith and with reasonable care.
In addition to transaction holds, the law allows eligible adults to designate a trusted contact for their accounts. This person, who could be a family member or friend, can be contacted by the bank if there are concerns about exploitation. However, it is important to note that a trusted contact does not gain access to the account or the authority to make financial decisions on behalf of the account holder.
Georgia’s initiative is part of a broader trend, as at least 33 states have enacted similar laws that allow financial institutions to delay transactions when they suspect financial exploitation. The Federal Trade Commission (FTC) has identified 24 states with such laws, although it cautions that its data is not exhaustive and encourages individuals to verify their state’s current statutes.
The specific powers granted to banks vary by state. Some states allow institutions to pause transactions independently, while others require them to report suspected exploitation to law enforcement or adult protective services. The age of protection also varies, with some states extending coverage to younger adults with qualifying disabilities. Additionally, the duration of holds can differ significantly, with some states permitting only a few business days of delay, while others allow for longer investigations or court orders.
For example, Colorado’s ASSET Act allows banks to delay disbursements when they believe a vulnerable adult is at risk, requiring notification to law enforcement or adult protective services. Similarly, Maryland’s Vulnerable Adult Banking Protection Act permits financial institutions to delay suspicious disbursements for up to 25 business days, while North Carolina’s law allows for holds of up to 60 days.
Despite these protections, it is crucial for individuals to remain vigilant. Scammers often employ tactics that isolate victims and create a sense of urgency, discouraging them from seeking help from family or financial institutions. While laws like Georgia’s provide a safety net, they cannot guarantee that every scam will be caught in time.
To enhance personal security, individuals are encouraged to take proactive measures. This includes establishing a trusted contact with their bank, enabling notifications for account activity, and discussing emergency verification codes with family members. Such precautions can help mitigate the risk of falling victim to scams.
In conclusion, Georgia’s new law represents a significant step in the fight against financial exploitation of vulnerable adults. By allowing banks to pause suspicious transactions, the law aims to provide a critical buffer against scams. However, the effectiveness of this legislation will ultimately depend on the vigilance of financial institutions and the awareness of individuals regarding potential scams. As the landscape of financial fraud continues to evolve, it is essential for both banks and consumers to remain informed and prepared.
According to CyberGuy, the importance of these protective measures cannot be overstated, as they can make a significant difference in preventing financial loss due to scams.
