Fighting fraud: AARP event offers tips for recognizing investment scams
FARGO - A common tactic of con-artists trying to promote fraudulent investments is offering a free lunch, said Sheri Haugen-Hoffart, investor education coordinator with the North Dakota Securities Department.
This drew a large laugh from the crowd of 100 attending a free lunch and learn event Wednesday sponsored by AARP North Dakota.
“But we’re giving you information and we’re done,” Haugen-Hoffart explained. “We’re not going to call you and give you a hard sell.”
Wednesday’s program at the Holiday Inn in Fargo was the latest in a series of lunch and learns AARP is hosting around the state to help North Dakota seniors prepare for and live the retirement they want, said Josh Askvig, advocacy director for AARP North Dakota.
The topic of investment fraud drew a packed house in Bismarck and Fargo, and another large crowd is expected today in Grand Forks, Askvig said. The program will be held again Sept. 9-11 in Dickinson, Minot and Williston, N.D.
Haugen-Hoffart outlined several devices con artists deploy to sell their schemes.
They move victims out of a logical state, where they know what to do with their money, to an emotional state, she said, pointing out it’s the same strategy used in marketing and commercials.
They promise phantom riches with words like “guaranteed” or “no risk.” They impart a sense of urgency, saying it’s a “limited-time offer” or there’s “only a few left.”
They use false titles or credentials, use language that makes them seem knowledgeable, or may use “toys and flash” – dressing well, wearing a Rolex, talking about vacation homes.
“Be aware that credibility can be faked,” Haugen-Hoffart said.
They name drop or imply that everybody is taking part in the investment. They target groups, like religious groups, ethnic communities and the elderly.
The most common victim of investment fraud is a college-educated married man age 55 to 64 who earns $50,000 a year and has above average financial knowledge, according to a victim profile developed by the Financial Industry Regulatory Authority.
Kelly Mathias, supervisor of investigations and examinations for the state Securities Department, outlined three cases his office investigated and were eventually prosecuted. He said most cases his office sees are Ponzi schemes.
One call to the Securities Department office could prevent many instances of fraud, he said, because the office can check whether the broker and the security being sold is registered.
He also suggested researching your broker yearly at www.finra.org.