The Research Center on the Prevention of Financial Fraud Investor fraud has increased more than 100% since the recession, says Laura Carstensen, founding director of the new Research Center on the Prevention of Financial Fraud, a joint venture of Stanford University's Center on longevity and the FINRA Investor Education Foundation. She talks with contributor Michelle Lodge about the nature of scams, especially those against senior investors, and what advisors can do to protect their clients.
1. What are the most common types of investment fraud involving senior citizens? Internet frauds. A pitch by email could go like this: "This is a really good investment, in clean energy or oil." The email may say too, that it's a new company starting up, and it looks great, and that the chance to invest is available today only. What is confusing and sounds familiar is that legitimate companies, such as those on QVC and the Home Shopping Network, say the same thing about here today; gone tomorrow. But with investor fraud, sadly, some people end up writing a check for their entire life savings-money they never see again. Another common fraud, which involves less money, is the lottery win from a foreign country. In the email, the reader is asked to send money to a location online so that the "winnings" can be transferred to his or her account in the United States. The types of fraud change daily. Now there are a lot of new scams following gold.
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