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How Seniors Can Protect Against Investment Fraud

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You’ve built a solid financial position for years - what happens when you are faced with investment opportunities that may wreak havoc on your portfolio?

Targets for Fraud

Unfortunately, seniors are particularly vulnerable to investment fraud, especially in today’s market. We have seen a number of fraudulent schemes that specifically target older groups of individuals throughout the U.S. and abroad. This is likely to continue for an extended period of time as fraudsters are continuously successful in their efforts to target older populations.

Many fraudsters believe that seniors have more money to invest, making them a viable target for their investment schemes. Fraudsters often seek out older investors through a number of methods, both in-person and online.

In our experience, we have seen fraudsters befriending seniors in person for the opportunity to obtain an investment. We have also seen a number of online interactions that lead to investments that are not properly vetted or investigated. Since seniors did not grow up with modern technology like younger generations, some seniors may be more vulnerable to internet scams.

That being said, here are three ways that seniors can protect themselves from investment fraud:

  1. Know who you’re dealing with. Personal interactions often yield better results than online interactions. However, this does not guarantee that your investment if safe and sound. As mentioned above, we have seen a number of fraudsters making in-person connections with seniors for this very purpose of making it seem like their investment is legitimate.

    Thus, it is crucial to know who you’re dealing with - talk to others in the community, look into their background online, and check to see if they are registered with government entities before giving them money. To find out whether an individual is registered, check out a great tool called BrokerCheck® by FINRA.
     
  2. Exercise extreme caution. It is easy to be persuaded by an enticing investment opportunity. However, it is crucial to exercise extreme caution before jumping at a particular opportunity. Fraudulent investment opportunities are often disguised as great opportunities by skilled salespeople.

    Make sure your decision is based on your rational thought process rather than a salesperson’s commission. Complete proper due diligence on your own or with an independent entity to ensure that you understand the risks involved with a particular investment.
     
  3. Determine your needs. In general, many salespeople sell products to individuals that normally have no need for a particular product. This also goes for the financial industry, as many investment professionals and advisors fail to understand what their clients truly need.

    For example, do you need to invest in a real estate investment trust (REIT) if your portfolio already consists of 90% real estate? Similarly, do you need to invest in a startup that won’t make money for years if you need dividend income on which to live? Determine how you want your money to work rather than allowing someone to take your money for their own purposes.

Overall, these three considerations will change your perspective on how to approach a particular investment opportunity.

If you have any questions for our financial attorneys, please contact us today. Call us at (239) 319-4434 for a confidential, no-cost consultation to discuss your case. Our attorneys at Vernon Litigation Group have years of experience in representing investors against rogue investment brokers, financial advisors, and others that fail to take investors’ interests into account.

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