Retired Boomers Increasingly Targeted by Financial Scam Artists
As baby boomers hit retirements, bringing with them the largest amount of wealth a single generation has ever possessed, regulators at the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) foresee an ever growing number of financial scams designed to separate boomers from their hard-earned savings. Elder financial abuse and fraud has increasingly been on the minds of regulators and agencies charged with protecting the public. FINRA has released warning after warning describing the most common types of elder financial abuse and scams to watch out for, and officials from the SEC have made appearances in major cities across the US, including Philadelphia, to give seminars in financial self-defense to elderly investors who represent the primary target of unscrupulous and predatory financial operators.
Scams Hit Everyday Elderly Investors Hard, Where It Hurts
While everyone pays attention when multibillion dollar Ponzi schemes like the Madoff scandal of a few years ago rock the financial landscape, it’s the far less sensational financial frauds that hurt investors the worst. They add up. A million dollars here, ten millions dollars there, and pretty soon you have a redistribution of wealth going from the retirement accounts of hard-working seniors to crooked financial operators and criminals.
Recently, a former Dayton Ohio financial broker, John Gregory Schmidt, allegedly bilked a group of elderly investors of more than $1 million by creating false financial statements and moving funds around in a Ponzi-like set up. By the time state and federal investigators busted Schmidt, that $1 million plus was gone. Worse still, Schmidt’s targets weren’t just elderly - they were suffering from Alzheimer’s and dementia.
Loneliness Makes Older Investors Vulnerable to Fraud
Commenting on the case, a former enforcement officer at FINRA, Brad Bennett, said, “It’s a big challenge that FINRA has been working on for years — the senior investors.” Since senior investors often become socially isolated, no one is checking in on them and their finances. Plus, their isolation makes them vulnerable to unhealthy relationships. “The price to keep the relationship going with the broker is, you have to buy some of their stuff,” Bennett said.