Seniors learn to sniff out scams
Investor scams soak too many seniors and often fly under the radar.
But by simply looking for red flags and checking credentials, most of these financial disasters can be prevented, says the Ontario Securities Commission.
“It’s one of the most underreported offences,” said Allister Field, acting manager of the commission’s enforcement branch. “What I’ve seen ... is the impact, mentally and physically on people that have been victims of these types of scams.
His comments opened a fraud prevention and literacy seminar at the Dunlop Drive Centre in St. Catharines on Tuesday.
The gathering of about 70 seniors is among many held by the commission across Ontario to publicize current investment scams and frauds and provide information on financial investment security.
Scam artists target people over 50 because of the financial pressures and mounting responsibilities many in this group face. It leaves them fearful about not having enough money for retirement, making them easier prey for scam artists.
“Some people have lost everything in these scams,” said Field, who also investigated the incidents as a former police officer. “Others are ashamed to tell their spouse and family, and don’t have enough time left in their life to recoup these losses.”
Field told the group a recent study has shown three in 10 Canadians have been approached in a potential investment fraud and nearly one in 20 have been a victim.
Among investment-fraud red flags are high-pressure sales tactics and promises of a high return with little risk. Another troubling sign is unexpected calls or e-mails from someone you don’t know, or where the investor is pressured into referrals for a fee.
Common swindles are “affinity frauds” targeting a group that relates to one another socially, linguistically or culturally. “They want to bring more and more (investors) in the group,” he said. “If the early people are doing well, it’s a big advertisement for later investors.”
“Quite often people get let down and lose a lot of money.”