Victims of con aren't dummies


You're an educated man, optimistic, higher income, knowledgeable about finances. And you're a good listener.

Some might call you a good catch. Con artists would consider you a good mark.

That's one of the findings of a recent study to find out why some older Americans fall victim to investment and lottery schemes while others don't.

Researchers compared 150 randomly selected adults ages 45 and up with 165 fraud victims who lost from $1,000 to more than $1 million to false promises.

The most surprising finding: Victims of investment schemes are no financial dummies. They scored higher on a financial quiz than non-victims.

"We thought it would be the opposite," says Grace Cheng Braun, chief executive of WISE Senior Services.

The NASD Investor Education Foundation commissioned the study conducted by WISE and the AARP Foundation.

Men more than women fall prey to investment swindles, according to the study. Women tend to succumb to lottery schemes. Investment fraud victims are more likely to listen to sales pitches from strangers than non-victims. They tend to make financial decisions on their own, so there's no adviser warning them against rip-offs. They are more optimistic, possibly giving them a "wishful thinking" attitude that schemers can exploit.

And victims have more setbacks, such as illness or job loss. That may make them more vulnerable, Cheng Braun says.

The findings will be used to devise ways to protect seniors.

For instance, educating people about finances may not be enough. Financial know-how seems to help when dealing with honest brokers, but is no shield against criminals' persuasive tactics, the report concludes. Financial literacy programs might have to start including information on fraud and persuasion.

What can seniors do to protect themselves now?

Al Weintraub is an 83-year-old fraud fighter with WISE. His advice: "Make sure you know who you are talking to. If you don't, hang up."

Weintraub concedes it's often difficult for older retirees to hang up on a caller.

Many are lonely, which is why they might spend time on the phone listening to a shady sales pitch, Weintraub says. They can avoid this by volunteering or getting involved in their community.

For many, too, hanging up is considered impolite. But few things are ruder than bilking the "greatest generation."

Cindy Post Senning, director of the Emily Post Institute, says there is a way to politely get rid of callers who want to keep you on the phone to pitch their scheme.

"I would just simply say, 'I never do business over the phone. Thank you very much. Goodbye.' " And do hang up," says the great-granddaughter of manners maven Emily Post. "You don't owe them anything more than that."

Reading, writing, write-off

Reader O.T. Jones of Oakland, Calif., had this follow-up question to a recent column on tax breaks when mixing vacations with business trips:

"I am part of a Master Sommelier Study group and taking the Advanced Exam portion of the program this fall. I am planning a trip to Burgundy and the Rhone with some others from this group for personal study to prepare for the exam. Can I write this trip off?"

As a Pinot Gris fan, nothing would delight me more than to say, "Oui! Bon voyage!"

For a more sobering take, I posed the question to RIA tax guru Bob Scharin in New York.

A write-off would be possible if the study were required for Jones' job, and the education was provided by a university or accredited group, Scharin says. "Personal study" is another matter.

After mulling the situation, Scharin's verdict: "It doesn't pass the smell test."

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