SACRAMENTO — Anne Marie Murphy, a partner at a plaintiffs' firm speaking for Consumer Attorneys of California, urged the Little Hoover Commission to consider state legislative action to restore clarity to civil remedies used against companies that facilitate elder financial scams.

Murphy said the Elder and Dependent Adult Civil Protection Act (often abbreviated in testimony as ADADCPA) reflected legislative intent to allow civil suits where a defendant “knew or should have known” it was assisting financial elder abuse. She told commissioners that subsequent federal court interpretations have tightened that standard — in some cases requiring plaintiffs to show the defendant actually knew it was assisting a scam — making meritorious cases harder to litigate and reducing incentives for industry prevention measures.

Murphy described the four‑party model she uses in cases: the victim, the overseas scammer, the communications platform that enables contact, and a financial intermediary (bank, brokerage or crypto firm) that moves or receives funds. To establish the "should have known" threshold, Murphy said lawyers typically document an account holder’s prior banking patterns (small social‑security deposits followed by large, out‑of‑pattern wires), expert testimony on banking practices, and what transpired at the branch or call center when the wire was executed.

Murphy also recounted recent legislative history: she said a 2008 bill introduced by then‑Sen. Darrell Steinberg expanded liability language and that a later clarifying bill, SB278, was heavily amended during two years of legislative negotiations and ultimately vetoed by the governor. She warned that federal preemption under the National Bank Act restricts what the state can require of nationally chartered banks, complicating a narrowly California‑focused solution.

Why it matters: Civil liability can create a private‑sector incentive to adopt detection and intervention practices that prevent losses before funds leave victims’ control. Murphy argued that clarifying state law would not necessarily impose an unworkable burden on financial institutions but would make civil remedies more attainable in appropriate cases.

What commissioners asked: Commissioners sought specifics about evidence used to meet a "should have known" proof threshold. Murphy pointed to deviations from a customer's usual transactional profile, teller‑or‑branch interactions that were coached by scammers, and banking records developed through expert analysis. She said those facts can make the threshold a jury question in state court, but that removals to federal court often change outcomes.

Limitations: Murphy acknowledged federal preemption concerns and the practical limits of civil litigation — her office accepts a small percentage of the scam cases it is asked to pursue because they are resource‑intensive and uncertain.