Strategies for Seniors to Minimize Chances of Financial Scams
In recent research conducted by the FINRA Investor Education Foundation, certain behaviours and characteristics in older adults have been linked to an increased risk of fraud victimization. Here are some key findings and tips to help you protect yourself.
One of the risk factors identified is a preference for higher financial risk. It's essential to be mindful of this and avoid investments that seem too good to be true, as they often are. Remember, guaranteed returns and promises of risk-free investing are red flags that should be taken seriously.
Financial fragility is another risk factor. Maintaining a solid financial foundation can help reduce vulnerability to fraud. Practicing healthy financial habits, such as budgeting and building an emergency fund, can bolster a sense of financial security.
Activities that increase fraud exposure, such as opening unsolicited mail, participating in telemarketing conversations, and answering unknown calls or texts, should be approached with caution. To reduce exposure, precautions like declining or blocking calls from unknown numbers, deleting messages from unknown senders, saying no to telemarketing offers, and throwing away junk mail can be taken.
Loneliness is also a risk factor. Engaging in community programs and interacting with others can help reduce the risk of scams that start with random contact from strangers online or via text message. Organisations like AARP and the Better Business Bureau can provide resources to help you learn about and track current scams.
If you have a brokerage account, knowing how to read your account statements is important. Before making any investment, research the seller and the product to ensure their legitimacy. FINRA BrokerCheck can be used to confirm whether a financial professional is registered and/or licensed and view their employment history.
If you have a question or concern about your brokerage account or an investment recommendation, you can call FINRA's Securities Helpline for Seniors toll-free at 844-574-3577. Staying informed about the red flags of fraud and current scams is essential.
If you think you've been the victim of a scam, report it to law enforcement, including the FBI's Internet Crime Complaint Center (if the fraud occurred online), the Federal Trade Commission, your state attorney general's office, district attorney, and local police department. You can also file a complaint about a brokerage firm with FINRA or submit a tip about possible securities fraud to the SEC.
Monitoring emotions and taking time to think things over before making investing decisions can help avoid potential scams. Ignoring promises of big rewards is a way to avoid investment scams. Taking steps to protect your financial accounts, such as adding a trusted contact, is recommended.
Remember, knowledge is your best defence against fraud. Having a foundational knowledge about financial products and basics of investing can make fraudulent offers easier to spot. To learn more about protecting your money, consider seeking additional information. Stay safe and secure in your financial endeavours!
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