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Investment scams are a booming business, and no one is more vulnerable than the elderly. In 2011, elder financial abuse resulted in at least $3 billion in losses. According to experts, however, that figure barely begins to reveal the full extent of elder fraud because the crime itself is so vastly underreported.
A recent article in AARP Magazine offers insight into why the elderly make perfect victims for investment scammers and con artists. The information comes courtesy of a former scammer named “Jim.” According to Jim, one reason elderly individuals are the best targets to rip off is because “many are sitting on fat nest eggs.”
“It’s the Willie Sutton rule: He robbed banks because that is where the money was,” Jim says in the story.
The emotional needs of the elderly also play a role in making them prime targets for investment scams.
“I think older people are easier to scam, because their emotional needs are closer to the surface. They aren’t afraid to tell people how much they care about their kids and grandkids. They aren’t afraid to share their fears about the unstable financial markets and how much they worry about being on a fixed income. These fears are real. And every one of them is a bullet for my gun,” Jim says.
In the article, Jim notes that his own scams of the elderly often involved bogus oil and gas units, phony business opportunities and gold-coin scams.
“Most people who get emotional quickly will fall every time. And if they don’t get worked up, I won’t waste my time with them. If prospects are asking a lot of questions or tell me they want to think it over or talk with their lawyer, I will hang up the phone. Victims don’t ask a lot of questions; they answer a lot of questions. Victims don’t read paperwork; they wait for you to tell them what it says. Victims don’t look for why the offer is a scam; they look for why the offer will make them money. They want you to make them feel good so they can pull the trigger,” Jim says.
Jim, 44, was convicted on charges of conspiracy to commit mail fraud in 2006 and went to prison for more than three years. Today, he works on the other side of the investment scam business by speaking at fraud-prevention conferences and working with groups such as the AARP.