Bismarck, ND - North Dakota Securities Commissioner Karen Tyler, on behalf of the North American Securities Administrators Association (NASAA), today outlined for law enforcement professionals the growing problem of investment fraud that specifically targets the senior investor.
Financial predators are targeting seniors with increasingly complex investment scams involving unregistered securities, promissory notes, viatical settlements and Ponzi schemes, said Tyler. She reported that these and other scams are reaching seniors through a variety of delivery systems, including the Internet. However, she said, personal pitches continue to ensnare the most victims. Tyler reported that more than 80 percent of seniors who are approached in person with a fraudulent investment fall victim to the scam, compared with about 20 percent of those approached in other ways. The dollar amount lost to fraud typically doubles when the pitch takes place face to face.
Tyler also stated many cases of fraud against seniors go unreported because the victims feel too ashamed and embarrassed to turn to authorities. Additionally, said Tyler, senior victims may fear they will lose their financial independence and control if family members find out about the fraud. Tyler stressed that regulators and law enforcement must work together to eliminate the barriers to fraud reporting that hinder both the ability to help the victim, and the ability to prevent the fraud from reaching new victims.
To help fight investment fraud against seniors, Tyler said that state securities regulators have launched a major education initiative designed to reach and assist senior investors. As part of the initiative, NASAA created an online Senior Investor Resource Center on the NASAA website (www.nasaa.org) to give senior investors the tools they need to reduce their risk of being a victim of fraud. State regulators also arm seniors with a Senior Financial Protection Plan and Check Before You Invest resource that help seniors ask the right questions and inquire with regulators before an investment is made.
Informed investors make tough targets for financial predators. Financial education is the first and best defense against investment fraud and exploitation, said Tyler, who also serves as chair of NASAA's Investor Education Section. NASAA is the international association of state and provincial securities regulators. Tyler's remarks came during a presentation at the National White Collar Crime Center's 2004 Economic Crime Summit in Dallas, Texas.