Investment scam education to be tested
A coalition including AARP and securities industry regulators is testing an investment-fraud awareness program in Spokane that, if successful, will be rolled out nationally.
The kickoff for the Investor Protection Program will be held Tuesday at the Southside Senior Activity and Community Center, 3151 E. 27th Ave. The two-hour program begins at 6:30 p.m., following a buffet dinner that begins at 5:30 p.m. The event and dinner are free.
Besides AARP, a senior advocacy group, the sponsors are the Washington Department of Financial Institutions and the Investor Education Foundation of FINRA, the Financial Industry Regulatory Authority, an industry watchdog group.
Foundation Vice President John Komoroske said Spokane was selected because it is a representative city in a relatively isolated media market that will allow backers to assess the program’s impact without having to account for the effect of information from outside the area. A second test in Orlando, Fla., is targeted at a narrower, older demographic, he said.
Komoroske said the program is directed at those 55 and older who have accumulated assets. Surprisingly, he said, the most vulnerable are not the stereotypical elderly widows, but men aged 55 to 60 with above-average education, income and wealth.
With their high self-assurance, they are less likely to question whether the broker they are dealing with is licensed and whether the investments they are buying are registered, he said.
Komoroske said investor fraud is hard to quantify because many victims don’t want to admit they’ve been had, and some may not even know it.
“Putting a price tag on this is extremely hard to calculate,” he said.
A foundation survey of Spokane investors found that 82 percent believe investment fraud is prevalent in the United States, but only 55 percent had checked the license status of their brokers, and only 28 percent the registration status of the securities.
Among the strategies the Investor Protection Program will teach are how to ask the right questions, and verify the answers; checking out brokers and their investments; and how to say “no.”
Komoroske said extensive advertising will be part of the program, and more information meetings are scheduled with senior and fraternal groups.
“The techniques used by fraudsters – like fake credentials and free dinners – are becoming increasingly sophisticated,” said the director of AARP Washington, Doug Shadel. “By learning how to recognize them, older investors can turn the tables and stop the scam.”
More information is available at www.SaveAndInvest.org /55Plus.
To register for the dinner and kickoff seminar, go to SaveAndInvest.org, or call (866) 862-0110.