This month, we are running a series of blog posts to urge British Columbians to be aware and report financial abuse involving seniors. World Elder Abuse Awareness Day occurs every June 15 and Seniors’ Week in BC was June 3 to 9. We encourage you to share these posts with friends, family, or people who work with the elderly to bring attention to the issue.
In our last post, we talked about investment seminars and high-pressure sales techniques in face-to-face meetings.
This week, we’ll look at some common scams that fraudsters use to take older people’s money. If you think an older relative or friend is involved in an investment scheme, or someone is pressuring them to invest, let us know.
When we see frauds in this area, it’s often associated with a fictitious investment that turns out to be a Pyramid or Ponzi scheme.
The investment “product” sold to people comes in many forms – an opportunity to invest in a private company, Forex trading, promissory notes, etc. You can consult this webpage to learn about the common schemes securities regulators uncover.
The common offering in almost all of these scams is guarantees of higher-than-normal rates of return, with little or no risk. There are other warning signs you also need to watch out for, but this one is key.
To avoid a scam or unsuitable investment, it is best to take time to consider the offer. You should also consult with a registered financial advisor independent of the deal. They can help you understand the investment, and if it is suitable for your portfolio.
We also talked about cold calls in our last post.
Cold callers target the elderly because they have money, and they are often at home during the day. Boiler room operators use cold calls and e-mail to solicit investors. They will try to persuade the person who answers the call to invest in the company they are promoting, often with the promise that there is an opportunity to get in before the company goes public.
Once they successfully take your money in this scheme, they might try to scam you again using another scheme. It’s called a recovery room scheme, and the hook is to suggest they can get your money back by paying them a fee.
The best way to avoid falling victim to a boiler room scheme is to hang up the phone. After you hang up, call the BCSC immediately. You may also want to refer to the Investment Caution List to see if the company that called you has come to the attention of regulators in the past.
In our final post, we will post links to information and resources where people can get help and learn more about elder abuse.
In April 2013, the BCSC released one settlement agreement and notice of hearing, and IIROC released one decision and a settlement relating to BC residents. The MFDA did not issue any decisions, and a hearing panel declined to approve a settlement agreement. Below is a summary of a few of the April 2013 enforcement […]