AARP Joins With FINRA to Protect Vermont Investors

The FINRA Foundation and AARP Vermont, along with a host of state and community collaboraters, recently launched a statewide campaign to protect older consumers from the growing threat of investment-related cons and scams. Governor Jim Douglas was on hand along with key collaboraters including State Treasurer Jeb Spaulding office and representatives from the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) to kick off the initiative in June at a press conference and educational forum for some 300 area residents in South Burlington.

Beginning this summer and fall, the public education campaign will work to educate Vermont’s senior investors on the dangers of investor fraud. This pilot initiative is designed to impact and change behaviors in the interest of protecting vulnerable older Vermonters from common financial scams. In addition to statewide advertising and promotion, the effort centers on delivering workshops in small and large venues across the state over the next 8-10 months.

With the economy struggling and the stock market still depressed, consumer protection advocates have noted a steep increase in the number of investment related scams. “Americans have lost more than $2 trillion of their retirement nest eggs, and now they’re desperate to get ready for retirement,” said John Gannon, President of the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. “Unfortunately, that creates the perfect opportunity for scam-artists to pitch their too-good-to-be-true and get-rich-quick schemes.”

The investor protection campaign seeks protect older investors from investment fraud by helping to equip them to recognize they are vulnerable to financial fraud, and provide ways to identify common persuasion techniques and protect themselves by asking and checking information. The workshops focus on:

• Key questions to ask before making any investment decision.
• How to verify the legitimacy of investment products and professionals.
• How to identify and report suspected investment fraud.
• Common tactics fraudsters use, and how to avoid them.

FINRA Foundation-funded research unveiled in July 2006 shattered the stereotypes of senior investment fraud victims. Not only was the fraud victim profile counterintuitive in many respects (for instance, victims were often financially knowledgeable men), but the influence tactics used by fraudsters were sophisticated and highly effective. These findings forced regulators and senior advocates alike to rethink how best to approach the challenge of equipping older investors with the tools and information they need to thwart fraudsters touting investment scams.

In response, a research-based, social change campaign was designed to reduce the incidence of investment fraud among investors ages 55 and over. It is being conducted in Vermont, Washington, Florida, Colorado and North Carolina.

“AARP has a long history of working to protect consumers and we are very concerned about the prevalence of phone scams, online pitches and free investor luncheons and seminars that prey on older Vermonters,” said Greg Marchildon, AARP Vermont state director. “Our offices in a number of states are helping lead this effort with the assistance of volunteers and other partner organizations.”