Seniors are increasingly a target for all types of scams according to a new report.
The report sought to pinpoint traits that may help explain why some people are more susceptible to investment fraud, Mr. Shadel said. Victims were more likely to be men 70 or older, and they tended to be risk takers. About half of fraud victims agreed that they did not mind taking chances with their money, as long as “there’s a chance it might pay off.”
One risk factor is a predilection toward making investment decisions.
Victims reported that they frequently received targeted telephone calls and emails from brokers and that they made five or more investment decisions a year. Also, they were more likely than general investors to respond to remote sales pitches, including those delivered in television commercials.
Nearly one in five senior Americans report being the target of a scammer and some of the success rate for scammers with seniors may be mental:
As many as 17 percent of Americans 65 and older report being the victim of financial exploitation, according to the Consumer Financial Protection Bureau. Estimates of annual losses are in the billions of dollars. One factor that may play a role is mild cognitive impairment, a condition that can be a precursor to dementia and can diminish an older person’s ability to make financial decisions.
You may also be pre-disposed to taking unwarranted risks:
Recognizing that you may have a predisposition toward risky behavior, like being open to pitches, may help you avoid being taken in, Mr. Shadel said. “You can at least be aware of your psychological mind-set,” he said. Consumers can take a quiz, based on the study’s findings, on the fraud watch website.
There are a few easy steps you can take to see if the investment opportunity you are presented with is legitimate and the people you are working with are on the level:
Mr. Shadel urged consumers to deal only with regulated brokers and investments, and to “ask and check”: If you get a call from a broker, ask if he or she is registered with state and federal securities regulators, he said, “and then check to see if it’s true.”
Maggie Flowers, associate director for economic security with the National Council on Aging, said that older people should be skeptical of any offers, particularly unsolicited ones. “Always ask for things in writing,” she said, “so you can think it through and talk through the options with a loved one or peers.”