CFTC Customer Advisory Encourages Older Adults to Stay Alert and Share Information About Fraud
Washington, D. C. — The Commodity Futures Trading Commission’s Office
of Customer Education and Outreach today issued the customer advisory,
Be Alert and Share Information to Help Seniors Avoid Fraud, in
recognition of World Elder Abuse Awareness Day. The advisory
encourages older adults to stay alert to fraud—especially on social
media—and to share information that could help others avoid fraud.
Fraudsters commonly target older adults because they typically
have acquired more assets over a lifetime of saving and investing.
Tips in the customer advisory explain how to avoid becoming a victim
of fraud, such as getting a second opinion before making an investment
decision, checking credentials and backgrounds of financial
professionals, and staying current on fraud trends. Even an
intervention from a trusted family member or friend can help older
adults avoid making a costly mistake.
Recent scams targeting
older adults include: Precious metals scams that encourage seniors to
tap into their retirement savings to purchase often over-priced gold
and silver coins
Romance scams that push victims into trading
digital assets or over-the-counter foreign exchange with unregistered
offshore dealers
Fee scams that promise unrealistically high
profits, but steal deposits, refuse withdrawals, and demand victims
invest more funds or pay concocted taxes and undisclosed fees
The advisory reminds older adults to be cautious of any person
or entity that approaches them on social media, dating apps, messaging
apps, or through unsolicited email or telephone call and wants to
discuss trading or investing in digital assets, precious metals, over-
the-counter foreign exchange (also called “forex” or “FX” trading), or
other commodity derivative products.
The advisory further
provides resources to help customers check registrations of financial
professionals and entities, tips to help older adults stay safe
online, and recommendations to have conversations about fraud.
About the Office of Customer Education and Outreach (OCEO)
OCEO is dedicated to helping customers protect themselves from
fraud or violations of the Commodity Exchange Act through the research
and development of effective financial education materials and
initiatives. OCEO engages in outreach and education to retail
investors, traders, industry organizations, and the agricultural
community. The office also frequently partners with federal and state
regulators as well as consumer protection groups. The CFTC’s full
repository of customer education materials can be found
at: https://www. cftc. gov/LearnAndProtect.
The Customer
Advisory is available in full below and on cftc. gov. *****
In recognition of World Elder Abuse Awareness Day, June 15,
the Commodity Futures Trading Commission reminds the public that fraud
criminals target older adults because they have typically acquired
more assets through a lifetime of saving and investing. However, by
being aware of common frauds and sharing information, you may be able
to both avoid fraud and stop it from harming others.
Fraud
can happen to anyone. It’s not about being gullible or incapable.
Fraudsters use lies to exploit blind spots and trigger emotional
reactions in their targets that nudge them into financial products
they don’t truly understand or make other harmful missteps.
Dealing with major traumas and life events—such as severe
changes in the health, the death of a loved one, divorce, retirement,
financial setbacks, and isolation—have all been identified as
increasing susceptibility to fraud. Conversely, getting a second
opinion before making an investment decision, checking credentials and
backgrounds, and staying current on fraud trends have been shown to
reduce victimization. Interventions by family or friends also can help
older adults avoid making costly mistakes.
Watch for Fraud on
Social Media
Many frauds begin on social media. Fraudsters can
hack profiles, create fake testimonials and profiles, and use targeted
ads and discussion groups to direct their appeals to people sharing
specific traits or interests. They can also use your posts and profile
information to identify where you work, if you are retired, where you
live, where you went to school, and your relationship status.
Fraudsters then use this information to make their cons more
convincing.
You should be especially cautious of anyone who
approaches you on social media, dating apps, messaging apps, or
through unsolicited email and wants to discuss trading or investing in
digital assets, precious metals, over-the-counter foreign exchange
(also called “forex” or “FX” trading), or other commodity derivative
products.
Common Scams Targeting Older Adults
Precious metals scams. These scams commonly start with spam
emails or videos forecasting economic collapse, government seizures,
or claim to know hidden tax secrets. The messages say the only way to
survive pending doom is by owning physical gold, silver, or other
precious metals. Sellers push customers to use their retirement
savings to buy overpriced coins. Many times, the sellers charge such
high mark-ups buyers are never able to see a profit. Learn more.
Romance scams. Fraudsters commonly pose as successful people
seeking friendships or romantic relationships. In a short amount of
time, they are calling or texting daily, but are too shy or unable to
video-chat or meet in person. Conversations eventually turn more to
money and markets. The fraudsters tend to talk about their own trading
successes, extravagant spending, and want to make financial plans
together as couple. Once trust is built, the fraudsters offer to
introduce victims to digital asset or forex trading. Learn more.
Fee scams. Fraudsters convince their victims they can earn
unrealistically high profits in a short amount of time. Victims are
told the more they invest, the more they can earn. Victims are shown
account balances that exceed expectations, and are encouraged to
invest more. But when they try to withdraw money, they must pay one
fee after another such as alleged commissions, transfer fees, taxes,
etc. As the supposed guaranteed profits were never real, the
fraudsters steal the victim’s deposits and the additional payments.
Remember, you should never have to pay more money to get your money
back. Learn more.
Protect Yourself and Others Check to be
sure the people or firms you trade with are registered with federal or
state authorities. Relying on registration alone won’t protect you
from fraud, but most scams involve unregistered entities, people, and
products.
Before trading forex, commodity futures, or other
derivatives, check with BASIC, a free tool offered by the National
Futures Association (NFA) to research the background of derivatives
industry professionals.
For virtual currency, see if the
platform is registered as a money service business with the Financial
Crimes Enforcement Network or with your state using the Nationwide
Multistate Licensing System.
Before paying for investment
advice or trading securities, visit FINRA’s BrokerCheck.
If
Someone You Know is a Potential Victim of Fraud
If you suspect
that someone you know is a potential victim of fraud, don’t delay
having a conversation. Be sure they understand you are coming from a
place of concern. The sooner you act, the less money they are likely
to lose.
Be patient. Some people may be embarrassed or
uncomfortable, and may need a little time to open up.
Don’t
judge or blame. Anyone can become a victim of investment fraud.
Be empathetic. Show them that you care and try to relate to
their circumstance.
Don’t jump to conclusions. Ask questions
and listen to the full answers. Don’t try to steer the conversation.
Keep trying. Every attempt at the conversation is valuable.
Report the fraud. Report fraud to your state attorney general,
the Internet Crime Complaint Center, CFTC, or the appropriate agency.
The information you provide can help in developing cases or alert
authorities to new trends.
Never make payments or give
sensitive information to anyone you have only met online.
Before making any investment, get a second opinion. Talk it
over with a financial advisor, trusted friend, or family member.
Don’t trade in markets or products you don’t fully understand.
If you get cold calls from people pressuring you to trade or
invest, just say ‘no’—then, hang up. Fraudsters are trained to keep
you on the phone to gather information and wear you down. Don’t give
them the chance.
Build up your resistance. Learn more about
fraud and stay current on the latest schemes through credible entities
such as state and federal government or law enforcement agencies,
including the CFTC, SEC, Department of Justice, Federal Trade
Commission, the Consumer Financial Protection Bureau, NFA, FINRA, your
state securities regulator or attorney general’s office.
Share what you’ve learned with others, especially if they are
socially isolated or have been victimized by fraud before.
This article was prepared by the Commodity Futures Trading
Commission’s Office of Customer Education and Outreach. It is provided
for general informational purposes only and does not provide legal or
investment advice to any individual or entity. Please consult with
your own legal advisor before taking any action based on this
information. This advisory references non-CFTC websites and
organizations. The CFTC cannot attest to the accuracy of information
in those non-CFTC references. References in this article to any
organizations or the use of any organization, trade, firm, or
corporation name is for informational purposes only and does not
constitute endorsement, recommendation, or favoring by the CFTC.