Fraud Aimed at Older Americans

Older Americans are the No.1 target of con artists. The files of state securities agencies are filled with tragic examples of seniors who have been cheated out of savings, windfall insurance payments and even equity in their homes.

To prevent more people from becoming victims, the Vermont Securities Division in conjunction with the North American Securities Association offers these defense tips:


  • Don’t be a courtesy victim. Older Americans often extend hospitality to phone callers and visitors to their homes. Con artists will not hesitate to exploit the good manners of a potential victim.
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  • You are under no obligation to stay on the phone with a stranger who wants your money. It is not impolite to explain that you are not interested and hang up. Save your good manners for friends and family members, not swindlers.
  • Check out strangers. Too many older Americans make the mistake of trusting strangers when it comes to their finances. Say “no” to anybody who presses you to make an immediate decision, giving you no opportunity to check out the salesperson, the firm or the investment opportunity. Before you part with your hard-earned savings, get written information about the investment, review it and make sure that you understand all of the risks.
  • A favorite tactic of telemarketing con artists is to develop a false bond of friendship. Swindlers know that many seniors welcome phone calls, even those from strangers. If you are dealing with a stockbroker or financial planner in person, don’t be swayed by offers of unrelated advice or assistance that are merely efforts to develop a sense of friendship and dependence. Don’t seek companionship from someone whose only real interest is to get his hands on your money.
  • Always stay in charge of your money. Beware of any financial professional who suggests putting your money into something you don’t understand, or who urges you to leave everything in his hands. Constant vigilance is a necessary part of being an investor.
  • If you understand little of the investment world, educate yourself or involve a family member or a professional, such as your banker or lawyer, before trusting a stranger who wants you to turn over your money.
  • Never judge a person’s integrity by the sound of his voice. Successful con artists sound professional and can make the flimsiest investment deal appear as safe and sound as putting money in the bank.
  • Some swindlers combine their sales pitches with polite manners, knowing that many seniors equate good manners with integrity. Remember that the sound of a voice, particularly on the phone, has no bearing on the soundness of an investment opportunity.
  • Watch out for salespeople who prey on your fears. Con artists know that many seniors worry about outliving their savings or losing their financial resources to a catastrophic event, such as hospitalization. It is common for swindlers and abusive salespeople to pitch their schemes as ways to build up life savings to the point where fears aren’t necessary.
  • Fear and greed can cloud your good judgment and leave you in a worse financial posture. An investment that is right for you will make sense because you understand it and feel comfortable with the level of risk involved.
  • Exercise particular caution if you are an older woman with no experience handling money. Many women who are in their retirement years received little or no education about handling money when they were young. They often relied on their husbands for major money decisions. As a result, older women, particularly those who received insurance payments for the death of a husband, are prime targets for con artists.
  • Monitor your investments and ask tough questions. Too many seniors compound the mistake of trusting unscrupulous salespeople by failing to keep an eye on the progress of an investment. Insist on regular written and oral reports. Look for signs of excessive or unauthorized trading of your funds. Don’t be swayed by an assurance that such practices are routine or in your best interests.
  • Look our for any trouble retrieving principal or cashing out profits. Because unscrupulous promoters pocket the funds of their victims, they often go to great lengths to explain why an investor’s savings are not readily accessible. In many cases, they pressure the investor to roll over non-existent profits into new and even more alluring investments, further delaying the point at which the fraud will be uncovered.
  • If you are not investing in a vehicle with a fixed term, such as a bond, then you should receive your funds or profits within a reasonable amount of time.
  • Don’t let embarrassment or fear keep you from reporting investment fraud or abuse. Older Americans who fail to report that they have been victimized often hesitate out of embarrassment or fear that they will be judged incapable of handling their own affairs. Con artists know about such sensitivities and even count on theses fears to prevent or delay the point at which authorities will be notified of a scam.
  • Most money lost to investment fraud isn’t recovered beyond pennies on the dollar. However, if you recognize that you have been victimized and speak up promptly, you might recover some or all of your funds.
  • Beware of “reload” scams. Most older Americans deal with a finite amount of money that is unlikely to be replenished in the event of fraud or abuse. Faced with a loss of funds, some seniors will go along with another scheme, a “reload”, in which the con artist promises to make good on the original funds that were lost. Too often, the result is that unwary seniors lose whatever savings they have left in the wake of the original scam.