3 Ways to Prevent Senior Fraud
Sheyna Steiner interviewed Christopher Cox, Chairman of the Securities and Exchange Commission and got his thoughts about Protecting Seniors From Scams.
Cox has some personal experience with semi-legal bullying tactics that scammers use. A salesman was constantly badgering his parents about an inappropriate mortgage refinancing tool. Despite Cox's warning, the individual continued to phone.
"Both in Congress and since I've become Chairman of the SEC, I've heard hundreds of similar stories from constituents and colleagues. It is heart breaking to see a loved one ripped off by semi-legal but under-handed tactics. That's why, at the Commission, we're always doing our best to protect everyone as if they're our own mother or relative."
What does Cox advise in order to deter fraud?
Cox summarizes what the SEC believes are the important social influencing tools.
"It isn't just financial competence but also street smarts and a healthy dose of skepticism that are in order to detect and avoid scams. We've identified more than a dozen social tactics that scam artists use in making their pitch.Among the most common:
- Phantom fixation: the con-artist dangles a sum of money, or possibly a vacation, to tantalize the victim.
- Social consensus: the scammer convinces the victim that his or her peers and neighbors, and other respected people in the community, are all making this particular investment.
- Scarcity approach: the victims are pressured to act fast, before it's too late.
- Reciprocity principle of social interaction: the con does a small favor for the victim, relying on human nature to induce the victim to return the favor in kind by buying the investment."
Here are the 3 Ways to Protect Seniors from fraud, according to Cox.
"Here are some specific ways that you can limit the number of solicitations that a parent or other senior in your charge receives, in order to better protect them from potential scams:
-- Register your parent or charge with the National Do Not Call Registry to reduce their exposure to unwanted cold calls. Children of senior citizens can do this for them.
-- Encourage your parent or charge to skip "free lunch" seminars, even if they are pitched as educational events, unless you have first researched the background of the sponsor, and unless you go to the seminar, too.
-- Maintain constant communication with your parent or charge about issues of significant financial consequence. This will give you an early-warning system when an unwanted solicitation first occurs, and help you to insure that it doesn't continue. "
The one other tip I would add is to buy a answering machine and make it a rule not to answer the phone.
