It’s an unfortunate truth that online financial fraud and identity theft is part of our lives. There’s no getting around it.
The Federal Trade Commission estimates that 25 million Americans are victims of consumer fraud each year. When it comes to scams, children and seniors are at the biggest risk.
Experian is alerted to 25,000-30,000 fraud cases reported each year.  Older investors are a favorite target of con artists who focus on investment fraud. Pursuit of seniors’ “nest eggs” is one of the fastest growing consumer fraud issues today.  Con artists of all types are finding ways to steal the savings of aging retirees.
It is estimated that one out of every five persons over age 65 has been victimized by a financial swindle, with older Americans defrauded out of nearly $3 billion dollars each year. The threat of senior financial fraud is expected to grow as the senior population itself grows with the aging of the Baby Boom generation. 
As a result, new laws are being proposed to safeguard and protect those who are vulnerable.
But the best defense against investment fraud is an educated and skeptical consumer.
Credit Freeze vs. Credit Lock
Getting a credit freeze is now free for everybody, including children under 16, under a new federal law that went into effect recently. 
A credit freeze, which is one way you can block access to your credit report, is fundamental to preventing new account fraud — the purest form of identity theft. When someone gets your Social Security number, they can open up new lines of credit under your name — and this counter measure can prevent that from happening.
Like a credit freeze, a credit lock stops others from accessing your credit information, but the process of locking or unlocking your credit report is a lot more convenient, with agencies allowing you to control access from a mobile app.
Here are some other things that you can do to help protect yourself from fraud:
One of the favorite methods to extract money from a would-be target is to get them on the phone and exploit their good manners. If you’re not interested, you have absolutely no obligation to a stranger who cold calls you and asks for your money. Your best defense in this situation is to not be afraid to offend. Just say you’re not interested - and hang up the phone.
Verify the opportunity
Verify that the investment offering is registered with your state securities regulator and/or the Securities and Exchange Commission. Say no to any salesperson that pressures you to make an immediate decision.
Call the DFI’s Securities Division at 360-902-8760 or 1-877-RING DFI (1-877-746-4334) to check the license of the investment professional and registration of the investment product.
Appearances can be deceiving
Never judge a salesperson’s trustworthiness based on how they look or sound. The only thing that should instill trust in you is that they are professionals and can provide verifiable data on the investment. No amount of salesmanship can make a bad investment into a good one.
Ask tough questions
Don’t be afraid to be confrontational. And don’t let yourself get overwhelmed by a seemingly superior knowledge of finances. What is the basis for the purchase price of the investment? Does it represent fair value? Are there any annual fees, holding charges, custodial fees, or hidden charges? Let the promoter know you want a complete disclosure of every last penny required to own this investment. Can you sell it whenever you want to? Is there a ready market of buyers? What are the restrictions to selling?
Get another opinion
If you’re not confident or lack experience in a particular investment, then consult with a third party such as your attorney or registered investment advisor for a second opinion before investing.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC