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Are you a target for investment scams?

American consumers are usually considered an investment savvy group. Investment scams are thriving, however, and it is often exactly when you think that nothing can happen to you that it usually does. State securities regulators estimate that securities fraud costs Americans billions of dollars each year. Certain groups of individuals, or demographics, are more likely to be the victims of investment scams than others.

What makes you a likely target?

The more money you have or are perceived of having the more attractive you will be to the perpetrator or "scammer". It is important to remember that the scammers are not discriminatory and the advent of the Internet has presented a vast opportunity for criminals to find new victims. However, certain individuals are at a higher risk than others.

What is the profile of a victim?
"Senior citizens are victims in 30% of all cases of fraud."

While there is no single profile of the investment scam victim, some scammers target identifiable groups, such as religious, ethnic, elderly and professional groups. This is known as "affinity fraud". The perpetrators are often members of the group or enlist respected group leaders to internally promote the investment deal to trusting members.
Con artists frequently use religion to get prospective victims to drop their guard.

Credible claims of special ties to or endorsements from a congregation or faith cause the victims not to examine or investigate the opportunities being offered.

One out of every eight individuals in the nation is a senior citizen. They currently comprise 12 to 13% of the population, however, they are victims in 30% of all cases of fraud!

For the retired and the elderly, wealth is not a renewable resource. The loss of wealth can mean the inability to meet medical expenses, loss of a home, or total dependency on family or outside institutions. Three out of four Americans over the age of 65 rely upon their investments to help maintain their income.

Why are seniors targeted?

One of the most commonly targeted groups is older Americans.
Seniors are often more isolated.

Due to physical problems and / or lack of regular interaction with friends and relatives, seniors are sometimes lonely and therefore more willing to talk to the potential scammer. Also, they sometimes have no one with whom they can discuss their financial affairs or get investment advice, making them more willing to place their trust in a convincing scam artist.

Seniors are targeted in large part because of the perception that they may possess a large amount of funds in savings and retirement accounts or in valuable property.

While anyone is potentially vulnerable to the various frauds and scams, according to AARP, one in four of individuals aged 65 to 72 are particularly vulnerable and one third of those 75 and older are classified as having a high vulnerability. (Only one in 14 under the age of 65 is particularly vulnerable to these threats.)

What can you do?

It is important that before you make any decisions that require you to provide money or financial information to a company or an individual, be certain to investigate thoroughly!

Insist on written information about the investment opportunity, review it thoroughly and make sure you understand all of the risks. Be sure to contact appropriate authorities to find out if the investment opportunity is registered and legitimate.

You owe it to yourself to protect your hard earned savings.

If you have questions about a particular investment or concerns about an investment that you have made or are considering, please contact Investchek by email or by calling 202.887.9363.

Investchek is a service of:

Smithbrandon International, Inc.