Little Hoover Commission to study financial scams, including elder fraud; staff to prepare scoping memos on related topics

The Little Hoover Commission agreed on July 1 to pursue a study requested by state Sen. Grayson into financial scams and fraud — including elder financial exploitation — and directed staff to prepare a scoping memo and schedule hearings.

The decision followed public comments from advocates who urged immediate state action to address high-dollar losses to scams, and a discussion among commissioners about the study's scope and likely state-level levers. Ethan Ritter, commission staff, told the commissioners staff has bandwidth to pursue two additional studies and recommended preparing scoping memos to narrow the target areas before starting full investigations.

The request from legislators (included in commission materials) asks the commission to examine the chain of payments, the role of financial institutions and payment platforms, and what California can do by statute or through moral suasion of industry. Public commenters emphasized the scale and human impact: "The question is what can California do about it? The answer... is a lot," said Ted Mermin, a UC Berkeley law professor who runs the California Low Income Consumer Coalition, referring to widespread scams that target older adults and immigrant communities.

Caleb Logan, a staff attorney at a Southern California nonprofit who focuses on elder financial abuse, urged the commission to consider how other countries have required reimbursement and compelled payment-service providers to take preventive steps. "The United Kingdom required reimbursement for fraudulently induced wire transfers in October 2024," Logan said, and Australia has adopted a Scams Prevention Framework law, he added.

Commissioners expressed broad support for taking on the topic while noting the need to scope the study to issues the state can reasonably influence. One commissioner observed the problem spans federal regulation, state statutes and private-sector practices and recommended the scoping memo identify where California can act and where coordination with federal regulators or other states will be required.

Ritter described a tentative timeline: staff would develop a scoping memo and convene hearings in the fall (he identified September and October as likely hearing months), with a final report targeted for late calendar 2025 or early January 2026 to inform potential legislative action next year. The commission also directed staff to produce scoping memos on three additional topics — prison education, youth suicide prevention and information-technology governance in state government — so the commission can decide which to fund next given available staff resources.

Next steps: staff will work with a subcommittee to draft the scoping memo for the financial-scams study and return to the full commission with proposed hearing dates and a recommended scope. The commission did not take a roll-call vote; commissioners indicated consensus to proceed with the study request included in Sen. Grayson's letter.