Help Prevent Elder Investment Fraud

On June 15th, World Elder Abuse Awareness Day, the Investor Protection Trust released results of an Elder Investment Fraud survey with some alarming results. According to the survey, 7.3 million older Americans—one out of every five citizens over the age of 65—already have been victimized in a financial swindle. The survey also revealed that many adult children are worried about their elderly parents’ ability to handle their own finances.
Take a look at some key findings of this survey:

• Half of older Americans exhibit one or more of the warning signs of current financial victimization. For example, more than one out of three seniors (37%) are currently being pitched by “people (who) are calling me or mailing me asking for money, lotteries, and other schemes.” Unfortunately only 19% of adult children believe that their parents are being pressured in such a fashion.
• Almost half of those aged 65 or over (44%) got at least two out of four questions wrong about basic investment knowledge.
• About one of three older Americans (31%) says they are vulnerable in one or more ways to potential financial victimization.
• Only 5% of adult children in touch with their parents’ doctors report “the healthcare providers ever mention[ing] any concerns about your parents handling of money or relayed any concern from your parent about handling money. However nearly one in five (19%) report the health care provider has mentioned concerns about “your parents’ mental comprehension.” Only 2% of Americans aged 65 or older say that their healthcare provider has ever asked about “how you are handling money issues or problems.”

Elder investment fraud can take many forms including unsuitable investments, fraudulent offerings, unregistered products, unlicensed advisers or brokers, theft or misappropriation of money. All elders are at risk of being taken advantage of, and important red flags include social isolation, dependence on others for daily care, loss of a spouse or those who are financially responsible for other adults.

Elders who exhibit any of these red flags can take important steps to prevent elder investment fraud.

• Information is the best defense. Any financial offers or investments should be accompanied by easy-to-understand detailed written information. If the details are not available in writing, be wary about the offer. If the information is difficult to understand, ask a friend, family member or trusted financial advisor for assistance.
• It helps to know what’s out there. Be aware of the financial scams that criminals use to prey on elders. To learn more, read list of top investor traps compiled by the North American Securities Administrators Association (NASAA).
• Elders who are lonely or isolated should foster social activity with friends or family members, so that in the event of a question or potential scam, they have someone to turn to for assistance.
• Reach out for help in uncomfortable or confusing financial situations. Any trusted person—a medical professional, pastor, accountant or adviser—can be someone to turn to when help is needed.

We all have elderly friends and family members in our lives. Take a moment to check in with your friends and loved ones to assure that they have the ability to manage their finances confidently and have an adequate support network in place. Online resources can be found at NASAA’s Senior Investor Resource Center.