A major public initiative to crack down on investment fraud by training thousands of doctors to spot older patients who may be particularly vulnerable, and then refer them to securities regulators and social workers, is going national after a successful pilot run in Texas.
The unprecedented effort, a collaboration between investor protection groups, medical associations, adult protection services and regulators in 22 states, Washington, D.C., and Puerto Rico, aims to tackle investment scams targeting seniors as a medical challenge rather than as a problem for law enforcement.It is backed by a 2008 Duke University study, which found that more than a third of Americans over the age of 71 have Alzheimer's disease or mild cognitive impairment (MCI). These conditions can make elderly consumers especially susceptible to financial abuse, including unsolicited pitches by fraudsters calling or mailing to ask for money to play lotteries, gamble or to participate in some other schemes.
According to a recent survey by the Investor Protection Trust, a nonprofit organization dedicated to investor education, which is funding the program, 7.3 million older Americans -- one out of every five over the age of 65 -- already have been a victim of financial fraud. About half of those surveyed also got at least two out of four questions wrong about basic investment knowledge.
"There is a medical component to elderly investment fraud that has been overlooked and cannot be addressed solely by state securities regulators," said Irving Faught, chairman of the Investor Protection Institute, in a statement. "We need to combine our efforts with the unique front-line perspective of doctors and other professionals to get help to victims, and those most at risk of becoming victims, at the earliest possible point."
In a phone-based news conference with reporters, state officials and a medical expert characterized elderly investment fraud as a national epidemic that may be curbed by tapping into the expertise of doctors.
"This is only going to get worse with the passing of time and the aging of the population," said Dr. Robert Roush of the Baylor College of Medicine, a top-ranked medical school in Houston, which created the program. Roush said in Texas, where the pilot was tested, 55% of doctors ascertained possible fraud in the course of talking with their elderly patients. He noted the likelihood of falling for an investment swindle should not be viewed as 'commentary' on seniors and their judgment, but rather as an aspect of normal aging and disease that must be dealt with methodically.
The 24 participating states and jurisdictions are: Alabama; California; Colorado; Delaware; District of Columbia; Georgia; Idaho; Illinois; Indiana; Iowa; Kentucky; Michigan; Nebraska; North Carolina; New Jersey; New Mexico; Oklahoma; Oregon; Pennsylvania; Puerto Rico; Tennessee; Utah; Vermont; and Washington.
The "Elder Investment Fraud and Financial Exploitation Prevention Program" is a partnership between the Investor Protection Trust, the Investor Protection Institute, the North American Securities Administrators Association and the National Adult Protective Services Association. Participating medical groups include the American Academy of Family Physicians, American College of Physicians, American Geriatrics Society, National Area Health Education Center Organization and the National Association of Geriatric Education Centers.
Introduction to Value Investing
Are you the next Warren Buffett?View Course »