Scam artists target state’s wealthy, trusting seniors
Mrs. Brown and her husband, who was a pilot, lost $60,000 after his co-pilot tricked them into directly depositing money into an offshore bank account many years ago.
The next day, the co-pilot rearranged his schedule so he never had to talk to her husband again, said Mrs. Brown, who declined to give her first name.
"It was stupidity. We never got a penny, nothing," said Mrs. Brown, an AARP Hawaii volunteer who shared her story at an investment fraud workshop recently.
"If you can't trust your co-pilot, who can you trust?" she said.
According to the Federal Trade Commission, Hawaii ranks seventh in the nation in the number of fraud complaints per capita. In 2006, island consumers lost more than $11 million to fraud.
Patricia Moy, senior enforcement attorney with the Hawaii Office of the Securities Commissioner, said she believes the reason Hawaii ranks so high in fraud is because there is a large elderly population in Hawaii and also because many Hawaii residents are trusting people.
"(The elderly) spent their lifetime saving their money," she said. "That's where the fraudsters go. They go after the money."
Moy, who spoke at the workshop, said the elderly are the No. 1 target for investment fraud because they are lonely, they have money and they have time to listen to the pitch.
Workshop speaker Sally Hurme, an expert on consumer fraud with AARP's national office, said only one in 15 victims comes forward to report the incident.
"If fraud isn't reported, it will continue to go on," she said. "It's important to report it even if you weren't taken by the fraud. It's to help others."
In a recent AARP survey, 67 percent of older residents are currently invested in securities such as stocks, bonds or mutual funds. The same percentage of respondents said they are concerned about investment fraud.
According to the Hawaii Office of the Securities Commissioner, the top five threats to investors in Hawaii are Ponzi schemes, unlicensed sale of securities, affinity fraud, unregistered investment products, and variable annuity sales practices.
"A lot of (the elderly) want to verify with us ... is this legitimate?" said Bruce Bottorff, AARP Hawaii associate state director for communications. "They want an immediate response from someone they trust."
Ninety-five-year-old Phyllis McDonald attended the workshop to learn more about fraud because she receives a lot of phone calls and mail that sound too good to be true.
"They often start with 'You've just won a thousand dollars,' " McDonald said. "I just hang up."
The Punahou resident, who has been living in Hawaii since 1950, said that she has never seen so much fraud in her life.
"We've got to stop this nonsense," she said. "It's ridiculous."
Don't be a victim
Tips for avoiding investment fraud:
» Do your homework before investing.
» Be skeptical of unsolicited offers for investment, especially from people and companies you don't know.
» Ask for written information about the investment product and business. If they refuse, don't do business with them.
» Verify any information that you get. Beware of testimonials.
» Avoid investments or brokers that require you to make a quick decision.
» Always verify the credentials of any insurance or investment agent with your state department of insurance or securities.
» If someone uses words like "guarantee," "high return," or "limited offer," it may not be an offer you want to take.
» If in doubt, keep your money in your pocket.
Where to call
People can call the Better Business Bureau of Hawaii Foundation Senior Scam Hotline at 536-8609 or the Office of the Securities Commissioner fraud hot line at 1-877-HI-SCAMS if they have any questions about the legitimacy of offers they receive.