Brokers can purge complaints to make themselves look ethical

The Wall Street Journal reports that "thousands of brokers have scrubbed their records clean of complaints by customers and employers, allowing them to hide information from potential investors. "The process, called "expungement" is under the direction of the Financial Industry Regulatory Authority (FINRA), that regulates the industry and is funded by those it regulates. According to an academic research study 70% of brokers who apply to have their misdeeds wiped from the records are granted their request. So don't trust the FINRA "broker check" resource on its website.

Toll-Free Securities Helpline for Seniors

The Financial Industry Regulatory Authority (FINRA) has launched the toll-free FINRA Securities Helpline for Seniors^TM to provide older investors with a supportive place to get assistance from knowledgeable FINRA staff related to concerns they have with their brokerage accounts and investments.

Senior investors can call FINRA's new toll-free FINRA Securities Helpline for Seniors (844-57-HELPS or 844-574-3577) from 9:00 a.m. – 5:00 p.m. ET, Monday through Friday, and get neutral, knowledgeable assistance with:

• understanding how to review your investment portfolio or account statements;
• concerns about the handling of a brokerage account; and
• investor tools and resources from FINRA, including BrokerCheck^®.

Fighting Financial Fraud

Red Flag of Fraud: Social Consensus
Fraudsters use all kinds of tactics to get you to give them your money. One of these tactics is called social consensus, which is when the fraudster tries to make you believe that other savvy people are already investing in a product or that they endorse it. Watch this short video to learn more about social consensus and how to avoid it. Brought to you by FINRA.

Video: How to Recognize a Free Lunch Investment Seminar Scam

More than 6 million Americans age 55 and older have attended a free-lunch investment seminar. But many of these so-called seminars are actually sales presentations, where the attendees are often pressured into making unsuitable—or even fraudulent—investments. If you, or a friend, neighbor or relative accepts an invitation to one, make sure you all know which red flags to look out for before you go. (<3 a="" finra="" from="" href="https://www.youtube.com/watch?v=35PubIQoWCE&feature=youtu.be" min.="">https://www.youtube.com/watch?v=35PubIQoWCE&feature=youtu.be

Who is susceptible to financial fraud?

According to research by Stanford and Yale neuroscience and psychology professors, investment fraud victims report higher impulsiveness and demonstrated less cognitive flexibility that non-victims.

Note that cognitive ability was NOT found to be related to fraud. Neither did victims prefer to take more risk than non-victims.  Many investment fraud schemes target educated white males who have proven to be susceptible to investment fraud.

“Together, these findings provide a first deep glimpse into factors that may confer vulnerability to investment fraud. Interestingly, cognitive abilities were not significantly impaired overall in fraud victims. Neither did fraud victims uniformly prefer to take more risk than non-victims. Fraud victims did, however, show reduced impulse control, and this was particularly apparent in the face of large potential gains. We interpret these findings to suggest that an inability to control one’s impulses under high stakes may confer vulnerability to investment fraud (and that behavioral assessments might be necessary to detect such a predisposition).” Details at: http://www.finrafoundation.org/web/groups/sai/@sai/documents/sai_original_content/p512736.pdf

Protect Yourself & Others from Financial Fraud

"The FINRA Investor Education Foundation has issued a new research report, Financial Fraud and Fraud Susceptibility in the United States, based on a survey of nearly 2,400 U.S. adults age 40 and older. The report reveals that over 80 percent of respondents have been solicited to participate in potentially fraudulent schemes, and over 40 percent cannot identify some of the classic red flags of fraud." 



According to experts, this fraud activity may be costing Americans about $50 billion annually (view the infographic).

"When it comes to financial fraud, America is a nation at risk," said FINRA Foundation President Gerri Walsh. "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."

Survey results revealed that financial fraud solicitations are commonplace, and Americans age 65 and older are particularly vulnerable. Read more about the report.

5 Tips to Help You Avoid Investment Fraud and Protect Your Finances Webinar

April 24 – Join experts from AARP and the Financial Industry Regulatory Authority Investor Education Foundation for a conversation on how to avoid investment fraud and answer viewer questions on Tuesday, April 24 at 2:00 pm, ET. (noon in Mountain Time zone). 

Register today at www.aarp.org/moneywebinars for any of the upcoming events. Past webinars are also listed on the site.

Upcoming:

May 17 – Social Security – Ask the Experts. Ask AARP experts questions about Social Security benefits, including spousal benefits, benefits for divorced couples, survivor benefits, Social Security and work, and Social Security and taxes. We invite you to hear answers to the most frequently asked questions on Thursday, May 17 at 7:00 pm, ET.