Released: July 17, 2006

Savvy seniors more likely to be conned

Source: By John Waggoner, USA Today

Contrary to popular belief, savvy investors are the most likely victims of financial fraud against seniors. A new study commissioned by the NASD says fraud victims score higher for financial literacy than the general population does. Victims scored an average 57% correct on an eight-question financial quiz, vs. 41% of non-victims.

The NASD study, to be released today, found that elderly victims of financial fraud also tend to be:

• Male, well-educated and married. Most have higher income than the average population.
• Reliant on their own knowledge when making financial decisions.
• More likely to have had recent “negative life experiences” — loss of job, illness, injuries or legal problems.

The survey also examined tapes of con artists’ pitches and found them to be remarkably intricate, tailoring an average of 8.6 ploys per pitch to fit the victim’s personality. Popular tactics:

• Dangling the prospect of wealth.
• Making the product seem rare, to increase its value.
• Claiming to be from a known legitimate business.

Con artists tend to chat with victims and get to know their weaknesses. One con artist, knowing his victims were often religious, would spend the first 15 minutes of a call praying with his victim.

“It’s really appalling,” says Mary Schapiro, president of regulatory policy at the NASD, the brokerage industry’s self-regulatory organization.

The study will be a highlight of a “seniors summit” that the Securities and Exchange Commission will hold today in Washington. The summit is designed to bring together regulators, policymakers and activists and kick off a fight against fraud targeting the elderly. The best ways to keep from getting conned:

Read Full Article: Savvy seniors more likely to be conned