We would never want to think about someone taking advantage of our elderly parents, but unfortunately, the growing incidence of senior fraud is putting many older adults in harm’s way, threatening to strip them of their assets, their independence, and their trust.
A survey by the North American Securities Administrators Association shows senior investment fraud accounts for nearly 50 percent of all complaints received by state securities regulators. That number is up from the 2005 survey, when 28 percent of fraud reports involved the elderly.
The financial industry is littered schemes that result in broken dreams for seniors. Stories of elderly seniors losing their life savings are far too abundant. Seniors are being targeted through the internet, mail, phone, in-home visits, and free “financial seminars” specifically tailored to large groups of seniors.
There are many reasons the elderly fall victim to fraud, including being too trusting and too good mannered to be rude, wanting a better rate of return on their money, believing the salesperson is nice, friendly, and caring, and being impressed with fancy credentials and titles.
Financial predators use tactics to instill fear in seniors – making them think they will run out of money and become a burden to their families. They inspire distrust in seniors of family members concerning their finances to keep seniors from disclosing the fraud. And they prey upon the loneliness, isolation, and availability of some retired or widowed seniors.
Whatever the enticing investment, scammers use specific tactics to hook seniors. Be cautious of the phrases, “your profit is guaranteed,” “it’s an amazingly high rate of return,” “there’s no risk,” “you can get in on the ground floor,” “you would be a fool to pass this by,” “this offer is only available today,” “it’s a secret investment tip just for you,” “I’ll get you the paperwork later,” and “just make your check out to me.”
How do you know if a potential investment is legitimate? Contact the state securities regulator to see if the salesperson is licensed in the state to sell the security and if the security is licensed for sale in the state. Most investments must be registered with the state securities regulator or with the Securities and Exchange Commission. If the potential investment is not properly registered, do not invest.
Check the person and check the history of this person and/or his or her firm.
One way caregivers can help protect their elderly loved ones from investment fraud is to have open, two-way communication when it comes to finances. Make sure the loved one is comfortable talking about money honestly and openly without fear of reprisal.
If possible, have them turn to you, or a trusted financial advisor or lawyer, before making any investment. Also, if an investor is real, he or she will have no problem speaking to the client’s family member before taking the money.
Give Always Best Care Senior Services a call at 860-533-9343 to learn about our veterans care, in-home care, assisted living referral services, or Alzheimer's and dementia care.
