Protecting Older Americans from Investment Fraud

Americans were hit hard by investment scams in 2021, with losses reaching nearly 1.5 billion dollars across more than 20,000 victims, finds a recent report from the FBI. This continues the stark increases in both victims and financial losses, with roughly 12,000 more victims and more than 1.1 billion more dollars lost compared to the previous year.

And, older Americans typically bear the brunt of this financial crime. One study finds that victims of investor fraud are more often older, male, white, married, and have higher socioeconomic status compared to the general US population. This means they have more money to lose from years of hard work, savings, and benefits, conversely having less time to recuperate these losses.

Investment Fraud: A growing problem.

Scammers have been taking advantage of the pandemic and volatile economic situation by offering new opportunities to “get rich quick.” From robocalls, email, TV, social media and more, it’s easier than ever to connect with people and try to convince them of a once-in-a-lifetime investment opportunity.  And with commodities having grown more nuanced, such as the rise of cryptocurrencies like Bitcoin, Ethereum, and Solana, these currencies, unlike government-backed securities and assets are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds, making them increasingly susceptible to fraud and scams.

That’s why it is more important than ever that we arm older Americans and consumers with helpful tips to avoid, detect and protect themselves and their loved ones from financial crimes.

Outreach and Education: Helping Protect Senior Investors and Their Caregivers

I recently joined a (virtual) session hosted by the U.S. Securities and Exchange Commission’s (SEC) Retail Strategy Task Force and Office of the Investor Advocate to discuss the unique challenges facing older investors in an increasingly complicated market and ways they can keep safe. Below are highlights from my conversation with Teresa Verges, Regional Trial Counsel for the Securities and Exchange Commission at the Miami Regional Office.

Teresa Verges: "Nancy, what do you think are some of the important things seniors can do to avoid being a victim of fraud?"

Nancy LeaMond: "First know that the criminals can make it sound SO TRUE and they are so convincing. So remember that every investment carries some degree of risk, and it’s important to look into who is offering the investment and into the investment itself – always. Avoid putting money into “can’t miss” investment opportunities or those promising “guaranteed returns.” Nothing is guaranteed when it comes to investments.