A Task Force has revealed that one out of five citizens over the age of 65 has been the victim of financial fraud. To detect the early signs of fraud and protect the older population from fallling prey to fraudulent schemes, the Elder Investment Fraud and Financial Exploitation Prevention Program (EIFFE Prevention Program) has teamed up the North American Securities Administrators Assocation (NASAA) and various medical associations to create safeguards. According to NASAA, there are common investment scenarios which elders and their families should be on the lookout for:
Common Investment Scam Scenarios
UNSUITABLE INVESTMENTS — What
might be suitable for one investor might
not be right for another. Securities
professionals must not recommend
investments that are inappropriate for a
customer’s age, risk tolerance and need
for access to the money.
PONZI SCHEMES — Ponzi schemes
amount to robbing an army of Peters to
pay a handful of Pauls. As the number
of initial investors grows and the supply
of potential new investors dwindles, the
Ponzi bubble bursts with the vast
majority of investors losing all or most
of their money.
AFFINITY FRAUD — In affinity fraud,
the senior makes an investment
because of a recommendation by a
“trusted” friend based on similar
UNREGISTERED INVESTMENTS —
The senior is sold a stake in a new
company or enterprise and is told that
the investment “does not need to be
registered” with the state or federal
UNLICENSED SALESPEOPLE — Those
who sell securities or provide investment
advice must be appropriately licensed. If
not, chances are they aren’t qualified to
offer investments or advice.
FREE LUNCH/DINNER SEMINARS —
Regulators find the majority of these
seminars are actually sales pitches.
SENIOR DESIGNATIONS —
Individuals may call themselves “senior
specialists” to create a false level of
comfort among seniors and then get
them to invest.
ANY SALES PITCH ACCOMPANIED
BY PRESSURE OR COERCION
If you or a loved one has been the victim of elder investment fraud or elder securities fraud, you may have rights to recover your money back.