(originally published May 2010)
World Elder Abuse Awareness Day (WEAAD) is June 15 and its goal is to raise consciousness of the ways seniors are exploited financially. While there are many forms of abuse, financial abuse is considered to be the most common, costing its victims an estimated $2.6 billion a year, according to the North American Securities Administrators Association. Not only does financial abuse wreck havoc on a bank account, it can also have a significant impact on a person’s health and relationships.
Investment fraud is one way that seniors can be taken advantage of financially. My office’s Securities Division regulates the sales of investments and investigates cases of investment fraud. Like other crimes, we find that seniors are one of the most commonly targeted groups of victims. One reason is that seniors are likely to have more money saved up to invest versus someone who is younger and just starting to save.
Additionally, seniors heading into retirement, or already living on a fixed income, may be worried about having enough money to live comfortably. Fraudsters often rely on fear-based appeals when soliciting victims. For example, they may say: “Have you saved up enough money to live comfortably during retirement? The cost of living is increasing and you might have unexpected medical bills. I’ve got an investment opportunity that is guaranteed to cushion your pockets so you can fully relax during retirement.”
In reality, promises of high returns are often unrealistic and no investment is ever guaranteed to make money. Seniors shouldn’t let fear lure them into a trap.
Seniors working with financial services professionals should monitor their monthly statements to ensure their money is being invested in the manner they instructed the professional. They should look out for unauthorized or excessive trading. Sometimes seniors are exploited by illegitimate brokers who push them into investments that are unsuitable for them but may result in a higher commission fee for the broker. Investment products should match your needs, goals and risk tolerance level, not the broker’s.
Another thing to look out for when it comes to investment fraud is financial services professionals who market themselves as “senior specialists.” Some fraudsters promote themselves as senior specialists without having any actual training or certifications to support their claim. To deter these deceptions, my office is finalizing a new rule that, starting this summer, will prohibit financial services professionals from using these designations without having the proper training and certifications. People who falsely use these titles to solicit victims will be subject to fines.
Seniors being abused financially, through investment fraud or otherwise, may show physical symptoms of financial abuse. Those who are defrauded or abused suffer a physical and emotional toll. Efforts have begun to help physicians and other medical professionals know the physical warning signs of fraud along with behavioral red flags. Warning signs include social isolation, depression, cognitive problems, delusions, stress-related health problems, change in appearance, poor hygiene and a change in their ability to perform daily activities. If medical professionals recognize these potential signs of investment fraud in elderly patients, they can direct them to my office for help.
If you or someone you know has fallen victim to investment fraud, contact the Indiana Securities Division at 1-800-223-8791 or file a complaint online at http://www.indianainvestmentwatch.com/. For more information on investment fraud and how to avoid falling victim to scams, visit http://www.indianainvestmentwatch.com/.