Consumer Protection and Investor Education for Seniors
Five Ways Senior Citizens Can Protect Themselves from Fraud
If you are a senior citizen, you can avoid this kind of victimization by following five self-defense tips:
1. Don’t be a courtesy victim
Older generations were taught to be courteous at all times, whether guests visit them in person or contact them by phone. Con artists often take advantage of these overly accommodating seniors, exploiting their good manners to get at their money. Remember, strangers who call and ask for your money should be regarded with the utmost caution. The best response is to hang up the phone.
2. Check out strangers touting odd deals
Trusting strangers is a mistake that many seniors make when it comes to their personal finances. Don’t feel pressured by someone who asks you to make an immediate decision, giving you no chance to check out the salesperson, firm, and the investment opportunity itself. Instead, get written information about the investment, review it carefully, and make sure that you understand all the risks involved before you part with your hard-earned money.
A favorite tactic of telemarketing con artists is to develop false bonds of friendship. That’s because they know that many senior citizens are eager to have someone to talk to on the phone, even if the caller is a complete stranger.
When a telemarketer phones, do not be swayed by offers of unrelated advice and assistance—they are merely efforts to develop a sense of friendship and even dependency for one purpose only: to win your confidence and take your money.
Also keep in mind that almost all investment products must be registered. The Regulation and Licensing, Securities Division can tell you if the investment is registered or not. Remember that extensive background information on investment salespeople and firms is available to you.
3. Never judge a person’s integrity by how they sound
Senior citizens who fall prey to a con artist often explain that the swindler sounded like such a nice person. Successful con artists sound professional and are able to make even the flimsiest investment deals sound as safe as putting money in the bank. They combine these sales pitches with extremely polite manners, knowing that many older people may equate good manners with personal integrity.
The sound of a voice, particularly on the other end of your telephone, has no bearing on the soundness of an investment opportunity.
4. Watch out for salespeople who prey on your fears
Con artists play on older people’s concern that they will either outlive their savings or see all of their financial resources vanish overnight as the result of a catastrophic event, such as a costly hospitalization. Playing on these fears of running out of money, swindlers often pitch schemes as a way for the elderly to build up their life savings to allay fears of running out of money.
Remember, though, that fear, like greed, can cloud good judgment, and can leave victims of fraud mired in a terrible financial position.
5. Don’t let embarrassment or fear keep you from reporting fraud or abuse
Some senior citizens fail to report that they have been victimized for fear that they will be judged incapable of handling their own affairs. Other seniors believe that their victimization will be viewed as grounds for forced institutionalization in a nursing home or other facility.
Con artists count on these sensitivities to prevent or delay the elderly from reporting the scam to authorities. While money lost to investment fraud is rarely recovered, there are also many cases in which older people discover that they have been misled about an investment in time to recover some or all of their funds.
If you fear you may have been victimized, don’t be embarrassed about contacting the New Mexico Regulation and Licensing Department, Securities Division (800) 704-5533.