A hotline dedicated to helping seniors avoid investment fraud returned $750,000 to investors in its first eight months of operation.
The FINRA Securities Helpline for Seniors, 844-574-3577, made its debut in April. It took in about 2,500 calls and generated the funds to investors through voluntary reimbursements from firms.
In several cases the Financial Industry Regulatory Authority cited as examples, the call to the helpline came from family or professionals working with seniors rather than the victims themselves.
Fraudsters often target elder Americans, in part because they often have money to invest, may suffer from cognitive impairment, are unfamiliar with some investments and can be vulnerable to influence.
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Calls to the helpline allowed authorities to spot some emerging fraud schemes. These included scams focused on taxes, on bogus lotteries and something called binary options.
State securities commissioners recently listed the top five fraud threats to all investors.
Here’s one case that FINRA said its helpline uncovered and resolved.
“An elderly investor’s accountant called the helpline after finding a suspicious document among his 86-year-old client’s tax receipts,” it said. “FINRA launched an investigation and discovered the client’s broker had borrowed $220,000 in 2012 and was repaying her $1,200 every month. FINRA notified the broker’s firm and within 10 days the firm terminated him. Separately, FINRA barred the broker from association with any FINRA member firm for his failure to cooperate with its investigation of his activities. The firm, previously unaware of the loan, made the client whole on the remaining balance owed and included a nominal interest amount.”
Securities officials regularly encourage investors to check out any offer before they invest and to check out the person offering the deal.