CFTC Issues Advisory On Elder Fraud

The Commodities Futures Trading Commission recently issued an advisory regarding elder financial fraud in recognition of World Elder Abuse Awareness Day on June 15^th. The advisory encourages elders to be on guard for scams and frauds that they may encounter, particularly on social media.

The press release from the CFTC’s Office of Customer Education and Outreach (OCEO) discusses the may ways that elders are lured into something that is nothing more than a fraud. In most cases, someone can lose money with little to no hope of getting it back.

Unfortunately, anyone can become a victim of fraud. Because seniors and the elderly typically have a lifetime of assets and property, fraudsters see them as a gold mine.

The Most Common Commodities Elder Fraud Cases Against Seniors

Seniors are much more tech savvy than in years past, and those who are more recently retired will have online access at home. So it’s not uncommon for them to receive targeted (and unwanted) email just like everyone else. Many also use Facebook, Skype, WhatsApp, and other communication platforms where strangers can reach out to them for frauds such as:

• Romance scams. Many elders live alone and don’t have much social interaction, especially after the death of a spouse. Fraudsters pose as someone who just wants a friendship or relationship, leading the trusting elder into a scam. While they communicate frequently with their target, they decline video or in-person meetings. Contact begins on the phone with a “wrong number,” private messaging apps (such as Facebook Messenger or Telegram), dating apps, and social media. Once they build trust with the elder, they begin discussing finances, trading successes in forex, digital assets and other mediums. The fraudster discusses building a future with the unsuspecting elder, who finds themselves lured into a fraudulent scheme when they send money or give them their financial information.
• Precious metals scams. Using “gloom-and-doom” scenarios in a spam email that takes the reader to a video, elders are convinced that the way forward is through owning precious metals. Many are convinced to take money from their retirement savings to “invest” in wildly overpriced gold and silver coins. But the sellers of the coins charge high markups so that the “investors” can’t recognize a profit. Silver Law Group represents multiple seniors against precious metal firms that are not registered with the CFTC or other governmental agency.  If you have lost money with an unregistered commodities firm, we may be able to help recover your investment losses.
• Fee Scams. “New investments” are the perennial favorite of fraudsters, claiming high, fast returns. The victims see “account statements” with fantastic numbers and are encouraged to continue investing. When the investor tries to withdraw money, they are told they must pay fees, commissions, taxes, etc. But there were no actual profits, and the fraudsters simply keep stealing money until it’s stopped.

It’s not uncommon for someone to receive a cold call for an “investment opportunity” like these, either. No matter who is offering it, due diligence is vital before spending anything, like using FINRA’s BrokerCheck to look at a broker’s background.

The National Futures Association offers a tool similar to FINRA’s Brokercheck called BASIC so you can research the background of derivatives industry professionals.

If you’re being offered virtual currency (cryptocurrency), you can research and find out if the platform is registered as a money service business with the Financial Crimes Enforcement Network. You can also find out if it’s registered in your state with the Nationwide Multistate Licensing System.

Why Are Elders More Susceptible To Fraud?

Research suggests that even more sophisticated and aware elders may react to an emotional response when dealing with someone who is trying to talk them into giving them money. A person experiencing cognitive impairment or decline is an obvious answer, but that’s not always the case.

Other research shows that changes in the aging brain may leave an elder unable fend off an attempt to defraud them. Because most people are too embarrassed, afraid or even unaware that they’ve been exploited, getting information becomes difficult for researchers, relatives, and law enforcement.

The National Institute of Health has this article as well as others on the subject. This article from Forbes Magazine offers more insight into elders who overlook warning signs of scams.

Silver Law Group represents victims of securities and investment fraud including claims for commodities fraud or cryptocurrency fraud.  We have helped investors recover millions of dollars and routinely work with investors who want to report fraud to the SEC or CFTC Whistleblower Offices.

Do You Know Someone At Risk Of Elder Financial Fraud?

If you understand and recognize a scam or a fraud when you see one, great. But don’t keep that to yourself. Every day, more unsuspecting senior citizens are defrauded out of their hard-earned money and don’t realize it until it’s too late.

Has an elderly friend or relative been scammed? They may be too embarrassed to tell you, especially if they believe you’ll take over their finances. Unfortunately, anyone of any age can be scammed, but elders are especially vulnerable. Of course, the crime should be reported to the police and other authorities such as the FBI help prevent more people from being scammed, and to possibly get money back.

If you know someone who may be vulnerable to fraud—or has already been the victim of fraud—you can implement checks to prevent them from being a victim again. Fraudsters pass around lists of people from whom they’ve already taken money. It’s not unheard of for an elder to be contacted again for the same purpose. Older seniors tend to be trusting and will listen to a pitch more positively than others, which is why the “free lunch seminars” tend to be so popular.

Bank and credit report monitoring are two of the best ways to keep tabs on a senior’s activities, even if you’re not in the same town. A separate spending account may also be one way to protect their income while giving them some free reign for spending.

Contact Our Firm If You Or A Loved One Has Been A Victim Of Elder Investment Fraud

Silver Law Group has represented and is currently representing elder investors who have lost much of their life savings due to Wall Street greed and disregard of elder abuse and exploitation laws. If you or a loved one has lost money investing due to violation of elder abuse and exploitation laws, you may be able to recover some or all of your losses.

Silver Law Group represents the interests of investors and senior investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.