Prevention of Older Investor Scams


Ben and Ida learned the hard way that there was no such thing as a free lunch when they were invited to a free gourmet meal in exchange for attending an investment conference. The elderly couple had been offered a guaranteed return on their investment; however, they lost several thousand dollars after opening an account with the sponsoring firm. Unfortunately, it’s not just them. The Interesting Info about Cryptocurrency crime investigation.

According to a survey by the North American Securities Administrators Association (NASAA), approximately half of all complaints received by state securities authorities are related to senior investment fraud. The percentage of fraud reports involving older people has increased from 28% in 2005 to 32% in 2015. Seniors who fall for financial sector scams sometimes find their retirement goals dashed.

It’s all too often to hear about older adults losing their life savings. In-home visits, phone calls, direct mail, and free “financial seminars” aimed at large groups of seniors are all methods of reaching out to elders, according to NASSA’s Director of Communications, Bob Webster. Unfortunately, many older adults fall prey to fraud because of the following:

  • Having a trusting nature and a lack of rudeness
  • Investors that are looking to maximize their returns
  • A presumption that the salesperson is kind, helpful, and concerned
  • Taking pride in one’s credentials and position

Webster warns that dishonest sales agents or advisers may use such designations as a stepping stone to acquire the trust of vulnerable seniors. Prospective investors, especially older people, have difficulty telling if a particular title is a genuine certification held by the agency or a marketing gimmick. Scammers prey on older people by making them worry that they will soon be a financial burden on their loved ones and outlive their savings. To prevent the elderly from reporting fraud, they sow seeds of doubt in the minds of family members over the senior’s financial situation.

They target the retired and the widowed because of their increased availability and vulnerability. How can you determine if a given investment opportunity is genuine? Webster advises investors to check with their state’s securities regulator to make sure both the salesperson and the security are legal to sell in their jurisdiction.

He says red flags include investments that promise significant returns with minimal risk. Scams involving assets can take numerous forms. Seniors wouldn’t consider it if it didn’t have a nice ring. Scammers target older people using various techniques, depending on the financial opportunity being presented.

  • You should be wary of claims like “your profit is guaranteed.”
  • “That’s a ridiculously high rate of return,” they said.
  • There is zero danger.
  • “Join us at the ground level.”
  • You are not smart enough to ignore this.
  • Only today can you take advantage of this offer.

For Webster, If something seems unbelievable, it probably is.

Cautionary Measures

Almost all investments are securities, meaning they must be registered with either a state’s securities agency or the SEC. Get in touch with your state’s securities regulator to verify the registration of the investment opportunity. Do not put money into something that has not gone through the required registration processes.

Verify their identity. Is this person authorized to offer this product by the state or the SEC? Be wary if that’s not the case. For example, are they an investment adviser compensated to provide advice regarding securities investments but not licensed to buy or sell them, or a broker who can buy and sell stocks, bonds, and other securities?

Learn the backstory. Have any complaints been lodged against this person or their businesses with the appropriate authorities? There may be little recourse for clients who lose money dealing with an unlicensed securities broker or a firm that goes out of business. An open line of financial communication between caregivers and their elderly charges is one approach to safeguard them from investment fraud. Ensure your loved one can talk about money openly and honestly without worrying about being judged or hurt. Before making any investment, they should consult with you or a reliable financial advisor or lawyer. A genuine investor won’t hesitate to contact a family member before stealing from an elderly client.

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