Navigating the world of investing can be complicated. For every legitimate investment opportunity, there is a multitude of scams. It is all too easy to misplace your trust and fall victim to investment fraud.
Senior citizens are at a particularly high risk for investment fraud. Because seniors are not always as technologically savvy as their younger family members, they are frequent targets for scams. To help combat investment fraud among senior citizens, the Security and Exchange Commission's Office of Investor Education and Advocacy has compiled a short list of investment fraud red flags that seniors should know about.
1. Guarantees of high returns with no risk
Any investment comes with a certain amount of risk. When an investment has the potential for high returns, it will typically also have high risks. A broker who claims that a particular investment opportunity is guaranteed to have high yields with no risk is almost certainly lying.
2. Unregistered brokers
Before you enter an investment deal, you should carefully research whether the investment professional you are working with is licensed and registered. It is never a good idea to buy an investment from someone who is unregistered and unlicensed, even if they are someone you know personally. Many of the scams that target senior citizens are perpetrated by unlicensed, unregistered and unscrupulous financial professionals.
3. Aggressive sales tactics
When you are buying an investment, you should not feel pressured to act immediately. There is no reason for a reputable professional to pressure you into acting impulsively. If your broker is pushing you to move quickly, there is a chance that the investment is a scam. You should have as much time as you need to consider an investment.
What to do if you are a victim of investment fraud
Even when using caution, it is still possible for senior citizens to fall victim to investment scams. Fortunately, there are legal options for seniors that may recoup their lost investments and prosecute the brokers who took advantage of them. You may wish to contact an attorney who specializes in investment fraud among senior citizens. Seniors who have been taken advantage of should have an advocate in their corner fighting for them.