Financial scams are as common as ever, but many Americans can’t spot the red flags, according to a FINRA Foundation survey.
More than 80% of respondents have been solicited to participate in potentially fraudulent schemes, and more than 40% cannot identify classic red flags.
“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 survey of nearly 2,400 U.S. adults age 40 and older shows older Americans (age 65 and older) are particularly vulnerable. Specific findings include:
- More than 8 in 10 respondents were solicited to participate in a potentially fraudulent offer. And 11% of all respondents lost a significant amount of money after engaging with an offer.
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- More than 4 in 10 respondents found an annual return of 110% for an investment appealing, and 43% found “fully guaranteed” investments to be appealing.
- Americans age 65 and older are more likely to be targeted by fraudsters and more likely to lose money once targeted.
Con artists are adept at using a variety of tactics to get their hands on consumers’ money. The FINRA Foundation’s survey found 64% of those surveyed had been invited to an “educational” investment meeting that was likely a sales pitch. Additionally, 67% of respondents said they had received an email from another country offering a large amount of money in exchange for an initial deposit or fee.
The survey also found that under-reporting of fraud is a major concern. Although 11% of those surveyed lost money in a likely fraudulent activity, only 4% admitted to being a victim of fraud when asked directly—an estimated under-reporting rate of more than 60%.
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