Survey of Older Hawaii Residents Reveals Investment Fraud Concern
By: Source: AARP.org Date Posted: 2007-04-05 12:13:36.193793-04:00
With financial crimes—including investment fraud—on the rise throughout the country, a majority (81 percent) of older adults in Hawaii say it is important for the state to strengthen regulations protecting residents from investment fraud and scams. This is among the key findings of a new survey of Hawaii residents age 50 and older who were asked to share their experiences, perceptions and knowledge of financial investments.
The survey reveals a disconnect between residents' concerns about investment fraud and their willingness to take basic precautions to avoid it, such as checking to see if their financial advisor is registered with the state. While 50 percent of survey respondents said they were concerned about becoming the victim of investment fraud, most (71 percent) do not check the background of their stockbroker, financial planner or advisor.
"This survey is part of a collaborative effort between AARP and the State of Hawaii to provide residents with information that will enable them to achieve financial security and steer clear of fraud and other marketplace hazards," said AARP Hawaii State Director Barbara Kim Stanton. "AARP is pleased to join with the Office of the Securities Commissioner to help consumers save and protect their hard-earned assets."
According to the survey, two-thirds (67 percent) of Hawaii's older residents are currently invested in securities such as stocks, bonds or mutual funds, with about half (51 percent) setting aside money primarily for retirement. Investors said they need more information on investment resources and where to turn with investment concerns.
Older investors are a favorite target of con artists who focus on investment fraud. Research shows that boomers and older investors are natural targets for a wide variety of unscrupulous marketing practices because they've had more time to accumulate significant assets for retirement.
Americans of all ages lose approximately $10 billion each year in fraudulent investments. According to the Federal Trade Commission (FTC), Hawaii ranked seventh in the nation last year in the number of fraud complaints relative to the size of our population. Overall, island consumers lost a reported total of more than $11 million to fraud in 2006.
Securities regulators advise anyone considering an investment of any kind—whether it be real estate, stocks, bonds, businesses or collectibles—to find out as much as possible about the investment and the company or individual selling it before investing.
In Hawaii, investors are encouraged to call state securities regulators to verify the registration of broker-dealers and their salespersons, as well as investment advisors and their representatives.
To report investment fraud, call toll-free 877-HI-SCAMS (877-447-2267).
Collaboration between AARP Hawaii and the state Office of the Securities Commissioner is made possible by a grant from the Investor Protection Trust (IPT). IPT is an independent organization that provides objective information needed by consumers to make informed investment decisions, and serves as a source of non-commercial investor education materials. It is funded by settlements and fines paid to the Securities and Exchange Commission (SEC) as a result of its enforcement actions against investment advisors and brokers.
To help investors do their homework to avoid fraudulent or unsuitable investments, the AARP Foundation has teamed up with the IPT in a national campaign to slow the rise in investment scams that are eroding investors' financial security.
Learn more about investment fraud and how to avoid it.
Read the Full Report: Investor Protection and Trust: A Survey of AARP Hawai'i Members
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