You shouldn't compare yourself to others - they're more fucked up than you think.
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 swindlers!
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 opportunity itself.
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 longer necessary.
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 20049.
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 wheel."
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 initial scam.
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- 424-3410.
Copyright 1994 by the American Association of Retired Persons.
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