Campaign Helps Spokane's Older Investors Fight Back Against Fraud By Teaching Them How to Spot and Resist Persuasion Techniques, "Ask and Check" Before Making Final Decisions

FINRA Investor Education Foundation, AARP, Washington State Dept. of Financial Institutions Offer Free Training and Tools to Help Investors Avoid Falling Victim to Fraudsters

Spokane, WA — A comprehensive new campaign is underway in Spokane to reduce the incidence of investment fraud among older investors. The program, which features hands-on training and online resources at SaveAndInvest.org/55Plus, was developed by the FINRA Investor Education Foundation in partnership with AARP Washington and the Washington State Department of Financial Institutions (DFI) to teach investors ages 55 and older the tactics commonly used by fraudsters and the simple steps every investor can take to reduce the risk of being defrauded. Spokane was selected as one of two cities to launch the campaign, which will roll out nationally in the coming months.

"Even if you have never heard an investment fraudster's sales pitch, you probably know somebody who has, because fraudsters tend to go 'where the money is' — and that means targeting older Americans who have accumulated sizeable retirement nest eggs," said Mary L. Schapiro, Chairman of the FINRA Investor Education Foundation, who also serves as CEO of FINRA. "Through this Investor Protection Campaign, the FINRA Foundation is providing free information and tools and offering simple steps that older investors can take to avoid becoming victims of fraud and to keep their investments safe now and in the future."

A survey of Spokane investors conducted by the FINRA Foundation in April 2008 found that a majority (82 percent) believe investment fraud is widespread in the United States, yet just over half (55 percent) had personally checked the background of an investment professional to see if they were licensed, and far fewer (28 percent) had checked to see if a security they were considering investing in was registered.

"The best thing investors can do is take the time to check out investment opportunities before making any decisions," said DFI Director of Securities Mike Stevenson. "A little time to 'ask and check' can make the difference between a financial gain or loss."

The FINRA Foundation funded national research in 2006 that shattered the stereotypes of investment fraud victims. Typical victims are financially knowledgeable; have an above average income; are college educated; and are self reliant when it comes to making decisions. And while a majority of investors ages 55 to 64 do not perceive themselves as vulnerable to investment fraud, their reported investment behaviors put them at risk. In fact, a majority of investors nationally indicated that they did not check either the licensing of a broker or the registration of an investment product before investing.

Throughout the month of May, the FINRA Foundation will provide persuasion training sessions and investor education seminars to help Spokane residents unravel "the psychology of a scam" by teaching them how to spot and resist common persuasion tactics, verify the legitimacy of investment products and financial professionals, and report suspected investment fraud.

"The techniques used by fraudsters — like fake credentials and free dinners — are becoming increasingly sophisticated," said Doug Shadel, State Director for AARP Washington. "By learning how to recognize them, older investors can turn the tables and stop the scam."

Free tools on www.saveandinvest.org/55Plus include a Scam Meter to help spot red flags in an investment pitch, as well as a Risk Meter to help individuals identify characteristics and behavior traits that may make them vulnerable to investment fraud. Campaign messages and materials will also communicate key strategies to prevent being taken in by investment fraud, including: 

1.  Ask questions and verify answers. Take time to learn about investments and the professional selling them. Turn the tables and ask questions to verify the legitimacy of an investment and investment professional.
2. Check out the seller. Before giving out personal information, ask whether the seller is registered with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or the Washington State Department of Financial Institutions. Find registration and other information on individual brokers, securities firms and investment advisor firms on BrokerCheck at www.SaveAndInvest.org/55Plus or by calling (888) 295-7422.
3. Check out the investment. Confirm whether a security is registered with the SEC and get access to a company's financial information by using the SEC's EDGAR Database, also accessible through www.SaveAndInvest.org/55Plus.
4. Beware of exaggerated claims. Any claim that sounds too good to be true is. Visit www.SaveAndInvest.org/55Plus to learn about persuasion tactics commonly used to perpetrate investment fraud.
5. Practice saying "no." Know your exit strategy from any investment conversation. Be prepared to end the conversation and tell anyone who offers you an investment product: "I am sorry, I am not interested. Thank you."

On May 13, 2008 the FINRA Investor Education Foundation and partners will host a free investor forum at the Southside Senior Activity & Community Center, 3151 East 27th Avenue. This event is open to the public. To register and for more information, call 1-866-862-0110 or visit www.SaveAndInvest.org/55Plus. The FINRA Investor Education Foundation supports innovative research and educational projects that give investors the tools they need to better understand the markets and the basic principles of saving and investing. To date, the FINRA Foundation has approved $14.6 million in grants and an additional $14 million in direct investor education programming. For details about grant programs and other FINRA Foundation initiatives, visit www.finrafoundation.org. The Foundation's parent, FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. For more information, visit www.FINRA.org.

The Washington State Department of Financial Institutions (DFI) regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. In addition to posting information about licensees and administrative actions, DFI's website, www.dfi.wa.gov, features consumer tips on a variety of financial fraud-related topics and the agency promotes financial literacy through a variety of media and outreach events and activities. The mission of the DFI Securities Division is "To protect the investing public and promote confidence in the capital markets." This mission is accomplished through a variety of regulatory and enforcement tools from reviewing offerings and licensing investment professionals to investigating complaints and bringing enforcement actions. DFI's state toll-free number is 1-877-RINGDFI or 1-877-746-4334.

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. They produce AARP The Magazine, published bimonthly; AARP Bulletin, a monthly newspaper; AARP Segunda Juventud, a bimonthly magazine in Spanish and English; NRTA Live & Learn, a quarterly newsletter for 50+ educators; and a website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.