Ten self-defense tips developed for older Americans by the North
American Securities Administrators Association (NASAA), the national
voice of the 50 state securities agencies responsible for investor
protection at the grassroots level.
1. Don't be a "courtesy victim." Older Americans are of the
generation that was taught to be courteous at all times to phone
callers, as well as people who visit them at home. Con artists will
not hesitate to exploit the "good manners" of a potential victim.
Remember that a stranger who calls and asks for your money is to be
regarded with the utmost caution.
You are under absolutely no obligation to stay on the telephone with
a stranger who wants your money. In these circumstances, it is not
impolite to explain that you are not interested and hang up the
phone. Save your good manners for friends and family members, not
2. Check out strangers touting "strange" deals. Trusting strangers
is a mistake that all too many older Americans make when it comes to
their personal finances. Say "no" to any investment professional or
con artist who presses you to make an immediate decision, giving you
no opportunity to check out the salesperson, firm and the investment
Extensive background information on investment salespeople from your
state securities agency (call NASAA at 202/737-0900 for the number)
or the National Association of Securities Dealers (1-800/289-9999).
Almost all investment opportunities must be registered for sale in
the state in which you live. Your state securities agency can tell
you if the investment opportunity is properly registered.
Before you part with your hard-earned savings get written information
about the investment opportunity, review it carefully and make sure
that you understand all of the risks involved.
A favorite tactic of telemarketing con artists is to develop a false
bond of friendship with older Americans. Swindlers know that many
senior citizens are eager to have someone to talk to on the phone ...
even if that someone is a complete stranger. If you are dealing in
person with a stockbroker or financial planner, do not be swayed by
offers of unrelated advice and assistance that are merely efforts to
develop a sense of friendship and even dependency.
If you are lonely and in need of companionship, don't make the
mistake of seeking it from someone whose only interest is to get his
or her hands on your money.
3. Always stay in charge of your money. A stockbroker, financial
planner or telemarketing con artist who wants your money will be more
than happy to assure you that he or she can handle everything,
thereby relieving you of the need to watch over and protect your nest
egg. Beware of any financial professional who suggests putting your
money into something you don't understand or who urges that you leave
everything in his or her hands.
Constant vigilance is a necessary part of being an investor. If you
understand little about the world of investment, take the time to
educate yourself or involve a family member or a professional, such
as your banker, before trusting a stranger who wants you to turn over
your money and then sit back and wait for results.
4. Never judge a person's integrity by how they "sound." All too
many older Americans who get wiped out by con artists later explain
that the swindler "sounded like such a nice young man (or woman)."
Successful con artists sound extremely professional and have the
ability to make even the flimsiest investment deal sound as safe and
sound as putting money in the bank.
Some swindlers combine professional-sounding sales pitches with
extremely polite manners, knowing the many older Americans are likely
to equate good manners with personal integrity. Remember that the
sound of a voice (particularly on the phone) has no bearing on the
soundness of an investment opportunity.
5. Watch out for salespeople who prey on your fears. Con artists
know that many older Americans worry 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. As a result, it is common for swindlers and abusive
salespeople to pitch their schemes as a way for older Americans to
build up their life savings to the point where such fears are no
Remember that fear and greed can cloud your good judgment and leave
you in a much worse financial posture. An investment that is right
for you will make sense because you understand it and feel
comfortable with the degree of risk involved.
6. Exercise particular caution if you are an older woman with no
experience handling money. As a con artist to describe his ideal
victim and you are likely to hear the following two words:
"elderly widow." Sadly, many women who are now in their retirement
years often received in their youth little or no education about how
to handle money. Women of this generation often relied on their
husbands to handle most or all major money decisions.
As a result, older women(particularly those who have received
windfall insurance payments in the wake of the death of a spouse) are
prime targets for con artists. Elderly women who are on their own
and have little know-how about handling money should always seek the
advice of family members or a disinterested professional before
deciding what to do with their savings.
One excellent resource available nationwide is the Women's Financial
information Program at the American Association of Retired Persons
(AARP). For more information, write: "Women's Financial Information
program," AARP, Consumer Affairs, 601 E Street, NW, Washington DC
7. Monitor your investments and ask tough questions. Too many older
Americans not only trust unscrupulous investment professionals and
outright con artists to make initial financial decisions for them,
but compound their error by failing to keep an eye on the progress of
the investment. Insist on regular written and oral reports. Look
for signs of excessive or unauthorized trading of your funds.
Do not be swayed by assurances that such practices are routine or in
your best interests. Do not permit a false sense of friendship or
trust keep you from demanding a return of your savings. When you
suspect that something is amiss and get unsatisfactory explanations,
call your state securities agency and make a complaint.
8. Look for trouble retrieving your principal or cashing out
profits. Many older Americans have little ongoing need for invested
funds, while others need returns that are paid out to them regularly
in order to supplement limited incomes. If a stockbroker, financial
planner or other individual with whom you have invested stalls you
when you want to pull out your principal or even just profits, you
may have uncovered someone who wants to cheat you.
Since unscrupulous investment promoters pocket the funds of their
victims, they often go to great lengths to explain when an investor's
savings are not readily accessible. In many cases, they will
pressure the investor to "roll over" non-existent "profits" into new
and even more alluring investments, thus further delaying the point
at which the fraud will be uncovered. If you are not investing in a
vehicle with a fixed term, such as a bond, you should be able to
receive your funds or profits within a reasonable amount of time.
9. Don't let embarrassment or fear keep you from reporting
investment fraud or abuse. Older Americans who fail to report that
they have been victimized in financial schemes often hesitate out of
embarrassment or the fear that they will be judged incapable of
handling their own affairs. Some senior citizens have indicated that
they fear that their victimization will be viewed as grounds for
forced institutionalization in a nursing home or other facility.
Recognize that con artists know about such sensitivities and, in
fact, even count on these fears preventing or delaying the point at
which authorities are notified of a scam. While it is true that most
money lost to investment fraud is rarely recovered beyond pennies on
the dollar, there also are many cases in which older Americans who
recognize early on that they have been misled about an investment are
then able to recover some or all of their funds by being a "squeaky
A good resource for older Americans who fear that they have been
victimized is the securities agency in the state in which they live.
For the telephone number and address of your state securities agency,
contact NASAA at 202/737-0900.
10. Beware of "reload" scams. Younger Americans who are ripped off
by swindlers are fortunate to the extent that they have the
opportunity to pick themselves up and restore some or all of their
losses through new earnings. However, most older Americans are
dealing with a finite amount of money that is unlikely to be
replenished in the event of fraud or abuse.
The result is a panic that is well known to con artists, who have
developed schemes to take a "second bite" out of senior citizens who
already have been victimized. Faced with a loss of funds, some
senior citizens will go along with another scheme (allowing,
themselves to, in effect, be reloaded) in which the con artists
promises to make good on the original funds that were lost ... and
possibly even generate new returns beyond those originally promised.
Though the desire here to make up lost financial ground is
understandable, all too often the result is that unwary senior
citizens lose whatever savings they have left in the wake of the
From: North American Securities Administrators Association
One Massachusetts Avenue NW, Suite 310
Washington, DC 20001
For more information, write or call the American Association of
Retired Persons at 601 E. Street, N.W., Washington, D.C. 20049, 800-
Copyright 1994 by the American Association of Retired Persons.
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