HF4502

Purpose

This bill creates a trusted contact program for financial services providers to help protect customers from financial exploitation and fraud. It also sets up safeguards and liability rules to guide how providers can use these contacts, how customers can designate or remove trusted contacts, and how providers must handle related security measures and reporting.

Main provisions

• Trusted contact definition

  • A trusted contact is a person aged 18 or older whom a customer designates for the financial services provider to contact in emergencies or when there is a loss of contact, suspected third-party fraud, or potential financial exploitation.

• Reporting suspected fraud or exploitation

  • Financial services providers may report suspected fraudulent activity or financial exploitation targeting a customer to appropriate law enforcement or public protective agencies, notwithstanding other laws.

• Establishing and using the trusted contact program

  • Customers may designate one or more trusted contacts for the provider to contact under specific circumstances:
  • The customer is not responsive to communications.
  • The provider encounters an urgent matter or emergency involving the customer and cannot locate them.
  • The provider suspects fraudulent activity or financial exploitation targeting the customer.
  • The customer’s account is deemed dormant and verification of status/location is needed.
  • Providers may establish procedures, requirements, and forms needed to implement the program.
  • Customers may terminate a trusted contact’s appointment at any time. Trusted contacts also may withdraw themselves at any time.
  • The provider may require documentation or verification to establish termination or withdrawal.

• Account security features

  • Providers may offer account security options that set transaction limits and allow limited access for trusted contacts to view account activity.

• Liability protections

  • Financial services providers are not liable for the actions of a trusted contact.
  • Providers are not liable for declining to interact with a trusted contact if they act in good faith and exercise reasonable care to determine the contact is acting in the customer’s best interests.
  • Providers are not civilly liable for actions taken to report suspected fraudulent activity or financial exploitation.
  • Providers are not civilly liable for implementing or not implementing, or for actions or omissions related to providing or administering the trusted contact program.
  • A trusted contact who acts in good faith and with reasonable care is immune from liability.

Significant changes from current law

• Creates a formal, optional trusted contact program in statute for financial services providers.
• Establishes explicit authority to report suspected fraud or exploitation to authorities.
• Provides clear procedures for designation, termination, and withdrawal of trusted contacts.
• Allows account security features linked to trusted contacts and limited viewing access.
• Extends broad civil liability protections for providers and protects trusted contacts acting in good faith.

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Relevant Terms trusted contact financial services provider fraudulent activity financial exploitation emergency not responsive urgent matter dormant account account security features transaction limits view account activity good faith reasonable care immune from liability civil liability termination withdrawal procedures forms verification law enforcement public protective agency