Guest Column: West Virginia Fraud Victims Deserve Restitution

Guest Column by Del. Eric Householder (R-Berkeley, 96th)
Majority Leader, West Virginia House of Delegates
February 4, 2024

I have worked hard to find ways to protect our taxpayers. This session I am sponsoring House Bill 4985, known as the Securities Restitution Assistance bill that will enhance the State Auditor’s Securities Division to protect seniors from financial scams and elder financial abuse.

We hear all the time how frauds and scams are getting more sophisticated by the day. Anyone can fall victim to a fake investment scheme, like a false certificate of deposit, a “pump and dump” sale on stocks or pressure to sell a life insurance policy for cash. Unfortunately, our older investors are at a higher risk of being taken advantage of in those kinds of scams. Even more troubling is that they have the most to lose, when their lifelong savings take a hit with just one mistake.

House Bill 4985 would create a securities restitution assistance fund that is modeled after the Consumer Financial Protection Bureau (CFBP) Civil Penalty Fund, which has been successfully operating for more than 10 years through both Republican and Democratic administrations. The CFBP Civil Penalty fund has paid more than $671 million back to consumers. Six other states have already passed similar bills to implement the same structure.

The Securities Restitution Assistance bill would build on previous state laws that I have helped pass over the years. The State Auditor’s Office has been working for years to help prevent fraud, abuse and neglect of our vulnerable West Virginians. I understand that a lot of victims are embarrassed to report financial crimes, but with a chance to recover some of their funds, the Legislature believes our seniors are more likely to come forward.

The bill is structured so that a Court or the Securities Commissioner would have to issue an order, and other common-sense requirements would need to be met for a victim to receive restitution under this proposal. No one who assisted or participated in the securities law violation would be eligible to receive money from the Securities Restitution Assistance Fund. Victims would need to apply for restitution within a year of their order and the funds awarded would be protected from garnishment or any other legal recovery process, unless that was coming from the state itself.

I believe this is a balanced approach at making things right for the many West Virginians who lose their hard-earned savings through no fault of their own. This bill has already passed the House Judiciary Committee and is waiting for the House Finance Committee to debate it next. I am confident we will have this bill to the West Virginia Senate for their consideration soon.