FOR IMMEDIATE RELEASE
Contact: Catherine Lu
(702) 486-6982 / 334-7953
(Carson City, NV; June 14, 2012) — Investment fraud/financial exploitation experts believe that elder financial abuse is worsening, according to a nationwide survey. Nevadans who suspect they are victims of financial elder abuse are encouraged to file a report with Secretary of State Ross Miller’s office.
“Elder abuse comes in many forms – physical, emotional, neglect or abandonment – and financial abuse often goes undetected because its warning signs are invisible,” said Secretary Miller, noting that financial abuse is considered to be the most common form of elder abuse, costing its victims an estimated $2.9 billion a year.
To help fight this problem, the Secretary of State’s office joins the North American Securities Administrators Association (NASAA) to offer tools to identify and report financial abuse or exploitation. Investment fraud is an area of particular concern, as victims can see their life savings depleted with little opportunity to recover financial stability.
“Financial losses through investment fraud scams can be devastating,” said Secretary Miller. “Those who lose their life savings suffer a physical and emotional toll, as well as a financial toll. They may become fearful, develop health issues, become depressed and even consider suicide. It’s imperative that financial abuse be reported promptly to the proper authorities.”
Securities fraud comes in many forms. The following is a list of common frauds targeting elders.
• Unsuitable Investments — What might be suitable for one investor might not be right for another. Securities professionals must not recommend investments that are inappropriate for a customer’s age, risk tolerance and need for access to the money.
• Ponzi Schemes — Ponzi schemes amount to robbing an army of Peters to pay a handful of Pauls. As the number of initial investors grows and the supply of potential new investors dwindles, the Ponzi bubble bursts with the vast majority of investors losing all or most of their money.
• Affinity Fraud — In affinity fraud, the senior makes an investment because of a recommendation by a “trusted” friend based on similar backgrounds.
• Unregistered Investments — The senior is sold a stake in a new company or enterprise and is told that the investment “does not need to be registered” with the state or federal government. Check with the Secretary of State’s Securities Division at (702) 486-2440 to determine if an investment needs to be registered.
• Unlicensed Salespeople — Those who sell securities or provide investment advice must be appropriately licensed. If not, chances are they aren’t qualified to offer investments or advice.
• Free Lunch/Dinner Seminars — Regulators find the majority of these seminars are actually sales pitches.
• Senior Designations — Individuals may call themselves “senior specialists” to create a false level of comfort among seniors and then get them to invest.
• Any Sales Pitch Accompanied By Pressure Or Coercion
World Elder Abuse Awareness Day on June 15 spotlights the growing problem of fraud targeting senior citizens. Investors and caregivers are urged to “investigate before investing” by calling the Secretary of State’s office at (702) 486-2440 to verify if the product and person selling it are registered/licensed and if there have been any complaints.
Elder financial abuse is an under-recognized problem with devastating consequences. The growing senior population is increasingly targeted for abuse with studies showing that women were twice as likely as men to be victims of elder financial abuse. Family members and caregivers are the culprits in more than half of these cases.
According to the survey released by Investor Protection Trust (IPT), 84% of the 762 respondents who deal with investment fraud/ financial exploitation believe that elder financial abuse is worsening. The full survey can be found on the IPT website at www.investorprotection.org or by clicking here.
Securities or investment fraud should be reported to the Secretary of State’s Securities Division at (702) 486-2440. Other types of elder abuse should be reported to Nevada’s Aging and Disability Services Division at (702) 486-6930 in Clark County or (888) 729-0571 in all other areas. For tips to recognize elder abuse and ways to protect yourself or loved ones, visit the “Securities Center” tab on the Secretary of State’s website at www.nvsos.gov or by clicking here.
NASAA, of which the Secretary of State’s office is a member, is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico. www.nasaa.org