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SALT LAKE CITY -- State investigators have noticed a disturbing rise in affinity fraud in Utah over recent years.
Securities officials say about half of the people victimized are elderly, partly because they've saved more money for their retirement. But the con artists running the schemes aren't just young adults trying to rip off older people.
Utah Division of Securities Director Keith Woodwell says, "We've also seen it through senior centers and places like that where people who get together and share common interests through senior groups or senior centers are targeted specifically with a fraud by someone they know."
Woodwell says it's not uncommon for seniors to be ripped off by other seniors in the Beehive State.
"There is an element where seniors will tend to trust someone a little more of their own age group," he explains.
These older scammers can play the victim pretty well. They tell their potential victims things like "we seniors need to look out for each other," and, "people our age can't trust the stock market anymore."
"The good con artists out there will follow the news and they'll adopt the same fears or concerns that their marks have," Woodwell says.
That's when the scammers claim they've found a safe investment, and they try to convince other seniors to join in.
"You're much better off dealing with a professional at an arm's length transaction; someone you don't actually know," Woodwell says.
So should seniors never trust their friends anymore and avoid getting involved in any investment pitched? Not necessarily. Woodwell says there are ways seniors can protect themselves before getting sucked into a scam.
- Take a hard look at the investment being presented. Don't decide to make the investment because you trust the person pitching it to you.
- Make sure you get the proper documentation of any investment.
- Go to another investment professional and get a second opinion.
- Check to see if the person presenting the investment has the proper licensing to sell it in the first place.
- Look to see if there are any previous bankruptcies filed by the presenter, or if they've had previous lawsuits.
Most importantly, Woodwell says you should contact the Division of Securities before making any investment. It can help you determine if the investment is legit. E-mail: pnelson@ksl.com
