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Are seniors easy targets for financial scams?

| May 15, 2020 | Securities Law And Litigation |

Financial fraud is an insidious and highly pervasive threat facing Americans. Anyone can fall victim to such predatory activity, but research has shown that

senior citizens are at a much high risk of being attacked by these scammers.  MSNBC reported in 2019 that these types of scams cost seniors nearly $3 billion each year, and The Federal Bureau of Investigation (FBI) and the Securities Exchange Commission (SEC) both offer similar outlooks on how these securities scams disproportionately affect people over the age of 65.

There is widespread consensus that these scams (callously) target seniors. What is less clear is why, and what victims can do to mitigate their losses.

Many factors might explain why seniors are particularly vulnerable:

  • Lack of Technological Savvy: Seniors tend to struggle with adopting and embracing new technology.
  • Cognitive Impairment: Seniors face a higher risk of impairments that affect decision making such as Alzheimer’s and dementia.
  • Accumulated Wealth: Unlike younger generations, many seniors have accumulated savings and other assets acquired over a lifetime at their disposal making them a “richer” target.

These factors are pertinent, but by no means exhaustive.  Another dimension to

the problem lies simply in the “scatter shot” model these scammers have found success in.  The “Nigerian prince” scam, well known by most Americans by now, was once new and people did not know they needed to be on the lookout for something resembling that paradigm.  Enough people wised up to this scam eventually, but when they did it was very easy for scammers to design and shift focus to another one.  To them, it is as simple as putting out as many emails or calls as they can to a virtually infinite pool of internet users until people stop biting.

Just because it happened, doesn’t mean it’s over

It’s understandable that a person might feel embarrassed by falling for a Ponzi scheme or a “Pump & Dump” scheme, or from being subjected to large losses due to unauthorized trading activities or other improper conduct by unscrupulous brokers.  But scammers are well aware of that.  A successful fraudster counts on their victims avoiding action and confrontation out of pride or shame.

Securities fraud is actionable, both civilly and criminally.  The process may not be straightforward, but the services provided by securities litigation firm with a wealth of experience and character can be indispensable to those hoping to recover their losses.