Can Banks Be Held Responsible for Failing to Stop an Elder Scam?

When an elderly person loses money to a scam, families often hear the same painful explanation: the victim authorized the transactions, so the bank is not responsible.

But elder financial exploitation is not always that simple.

Scammers do not usually steal from older adults by force. They persuade, pressure, isolate, deceive, and manipulate. A victim may walk into a bank branch and request a withdrawal. They may sign a wire form. They may tell a teller that everything is fine. But behind that “authorized” transaction may be a fraudster coaching them, threatening them, or convincing them that one more payment is the only way to protect or recover their money.

That is why a case Morgan & Morgan is handling against JPMorgan Chase Bank is so important. A federal court has denied Chase’s motion to dismiss a lawsuit alleging the bank failed to protect an 80-year-old Miami resident from an elder exploitation scam, allowing the plaintiff’s claims to move forward. The complaint alleges that Chase processed 30 suspicious, high-risk transactions, including several six-figure withdrawals, after fraudsters persuaded the plaintiff to withdraw and invest more than $1.3 million with promises of returns that never materialized. The complaint also alleges that Chase’s own systems flagged several transactions and that the bank failed to report the suspicious activity to Florida’s Central Abuse Hotline as allegedly required under Florida’s Adult Protective Services Act.

The case has not been decided on the merits, and Chase denies liability. But the court’s ruling raises a critical question for older adults and their families: when a bank sees repeated red flags, can it simply process the transactions and look away?

Why “Authorized” Does Not Always Tell the Whole Story

Banks often distinguish between unauthorized fraud and scams where a customer personally approves a transaction. If someone hacks an account or steals a card, the transaction may be treated differently than if the customer goes to the bank and requests a withdrawal.

But elder scams frequently exist in the gray area between consent and exploitation. The customer may be present. The signature may be real. The instructions may come from the account holder. Yet the decision may be based on lies, manipulation, or pressure from a criminal.

That distinction matters because older adults may be especially vulnerable to repeated grooming. A scammer may begin with a small request, then escalate. They may claim the money is part of an investment, a fraud investigation, a government payment, a tax issue, a romantic relationship, or an emergency involving a loved one. They may instruct the victim not to speak with family members, not to answer questions, and not to tell bank employees the real reason for the withdrawal.

In the Chase case, the alleged transactions were not a single isolated event. According to The U.S. Sun, Olga Ponorovsky, an 80-year-old retired engineer from South Florida, claims she made 30 transactions over five months totaling more than $1.3 million, including individual withdrawals of $80,000, $100,000, $149,000, and $210,000. The withdrawals allegedly took place in person at a Chase branch in Hallandale, Florida, where she had banked for more than a decade.

Those facts are important because elder scams often become easier to spot as the pattern develops. A transaction that might look unusual once may look alarming when repeated again and again.

What Red Flags Might Matter?

Not every scam creates bank liability. Every case depends on the facts, the applicable law, and what the financial institution knew or reasonably should have recognized. But certain red flags may matter when evaluating whether a bank had an opportunity to intervene.

A sudden pattern of large withdrawals from an older customer’s account may be one warning sign. So may repeated transactions that are inconsistent with the customer’s normal banking history. Other warning signs may include unusual wire transfers, withdrawals made under visible stress, confusion about the purpose of the transaction, payments to unfamiliar people or entities, or a customer who appears to be following instructions from someone else.

The Consumer Financial Protection Bureau has said banks and credit unions are “uniquely positioned” to detect when an older account holder has been targeted or victimized, and the agency urges financial institutions to report suspected elder financial exploitation to appropriate local, state, and federal authorities.

That does not mean every bank is automatically liable whenever a scam occurs. But it does mean financial institutions are often in a position to notice patterns that families may not see until it is too late.

Florida’s Reporting Law Matters

Florida law is especially relevant in the Chase lawsuit. Under Florida’s Adult Protective Services Act, certain people and professionals must report known or suspected abuse, neglect, or exploitation of vulnerable adults. The statute specifically includes a “bank, savings and loan, or credit union officer, trustee, or employee” among those who must immediately report when they know or have reasonable cause to suspect that a vulnerable adult has been or is being exploited.

That reporting requirement is at the heart of why this case has broader significance. The lawsuit alleges that Chase failed to report the suspicious activity to Florida’s Central Abuse Hotline. Morgan & Morgan attorney Andrew Frisch has said that if the bank had reported the activity, it may have saved the client from becoming a victim of the financial scam.

This is not just a technical legal issue. Reporting suspected exploitation can trigger scrutiny from people trained to deal with elder abuse and financial exploitation. It can bring Adult Protective Services, law enforcement, family members, or other trusted contacts into the picture before the scam escalates further.

Banks May Have Tools to Slow Suspicious Transactions

Across the country, laws and regulatory guidance increasingly recognize that financial institutions may need to do more than process a transaction when elder exploitation is suspected. Federal agencies have noted that supervised institutions have used transaction holds and disbursement delays to prevent consumer losses in situations involving elder financial exploitation, and some state laws permit institutions to temporarily hold or delay transactions when exploitation is suspected.

Florida has also enacted protections intended to help prevent financial exploitation of specified adults. Florida law recognizes both the right of adults to control their own assets and the need to give financial institutions the ability to place narrow, time-limited restrictions when there is a reasonable belief of financial exploitation. Under that law, a financial institution that reports suspected exploitation may delay certain disbursements or transactions when specific requirements are met.

These types of laws reflect an important shift: preventing elder exploitation is not only a family responsibility. Financial institutions may also have a role to play when the warning signs appear inside the banking system itself.

What Families Should Know Before Giving Up

After an elder scam, families may be told that nothing can be done because the victim willingly moved the money. That may be true in some cases. But it is not something families should simply assume.

A legal review may look at how many transactions occurred, how large they were, whether they matched prior account activity, whether bank employees raised concerns, whether internal fraud systems generated alerts, whether the bank had policies for elder exploitation, whether state reporting laws applied, and whether anyone failed to act after suspicious activity became apparent.

The Chase case is an example of why those questions matter. The plaintiff’s claims are moving forward after the court denied the bank’s motion to dismiss, but the outcome has not yet been decided.

For families, the lesson is clear: do not assume an elder scam is over simply because the money left the account. Preserve bank records, transaction receipts, wire instructions, emails, texts, call logs, and any communications with the scammer or financial institution. Report the suspected exploitation. And speak with an attorney who can examine whether the scammer was the only party responsible.

If you or someone you love lost money in an elder financial scam, Morgan & Morgan may be able to help. Our attorneys can review what happened, investigate whether warning signs were ignored, and explain whether you may have legal options. Contact us today for a free, no-obligation case evaluation.