Pittsburgh, PA - Sept. 20, 2013 - An alarming new study released this month by the Financial Industry Regulatory Authority’s (FINRA) Investor Education Foundation reports that the majority of study respondents have been solicited to participate in scams and that nearly half of those surveyed were not able to identify classic red flags of fraud.
Nearly 2,400 U.S. adults aged 40 and older were surveyed between September 28, 2012 and October 4, 2012 by the Foundation. The report revealed more than 8 in 10 respondents were solicited to participate in a scam, while 11 percent of all respondents lost a significant amount of money after engaging in the fraudulent offer. The study suggested older Americans (age 65 and older) are especially vulnerable to fraud and are more likely to lose money once targeted. The inability to identify fraud characteristics could place Americans at risk of losing a large amount of money. FINRA estimates Americans lose $50 billion a year due to financial fraud.
"When it comes to financial fraud, America is a nation at risk. Fraudsters are very effective at reaching and enticing vulnerable populations into turning over their money, and far too few Americans are able to detect likely fraudulent sales pitches," said FINRA Foundation President Gerri Walsh.
The study, Financial Fraud and Fraud Susceptibility in the United States, also discovered a major concern in the under-reporting of fraud. While 11 percent of respondents said they lost money in a likely fraudulent activity, only 4 percent admitted to being a victim of fraud.
“Reporting what consumers believe to be scams can help us warn others about the potential for fraudulent activity and in turn, can save Americans from losing money,” said Warren King, president of the Better Business Bureau of Western PA. “BBB will also investigate fraud and share information on scams with state and local enforcement agencies to help protect the public from becoming victims, but it’s important that consumers are telling us about their experiences.”
Your Better Business Bureau has partnered with FINRA to help Americans identify and avoid financial scams. The following items are a list of common red flags that may signal fraudulent activity. If you answer “yes” to any of the following questions, contact your BBB for more information or to report a possible scam:
Have you received a phone call asking for your personal information, bank account or credit card numbers, or Medicare ID number?
Did you receive a check in the mail with a letter stating you’ve won a sweepstakes or prize?
Has someone knocked on your door selling products or services without proper registration or a solicitation permit?
Does an offer or product sound too good to be true?
Did you receive an email claiming to be from your financial institution asking you to update your account information?
Were you invited to an estate planning seminar?
Did you get a call from someone in distress claiming to be your grandchild asking you to wire money to get out of a bind?
For more helpful consumer tips on financial fraud, visit www.bbb.org and BBB Smart Investing.
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