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The Wall Street Journal just ran an article giving insight into the types of Americans who fall victim to investment fraud.
The recent financial climate has perhaps made people more susceptible to investment schemes promising quick income and guaranteed returns, but studies show average investment fraud victims have done their financial homework.
According to the article, which can be viewed in its entirety here:
Studies of scammers and fraud victims have found some eye-opening trends. Such victims aren’t necessarily uneducated and gullible, or naive seniors. The typical investment-scam victim is an optimistic married man in his later 50s who has a higher-than-average knowledge of financial matters and deep confidence in his own judgment, according to research funded by the Financial Industry Regulatory Authority’s Finra Investor Education Foundation.
Another trait: Investment-fraud victims tend to believe that scams happen only to someone else, but they also tend to feel insecure about their finances, something that may be familiar to many people these days.
As I have mentioned before on this blog, an NASD study shows that most investment fraud victims are men, are married, are better educated, and have higher levels of income.
Americans lose billions of dollars in financial scams each year. The reason why the Bambi Holzers and the Bernie Madoffs have become good at scamming customers is that they are talented at playing off of investors’ emotions, and they are hoping victims will feel either too embarrassed or defeated to put a stop to their faulty investments.
If you feel you have been a victim of investment fraud, there is no reason not to fight back. These studies show investment fraud is due more to crafty brokers involving outright deception, rather than the incompetence of the investor.
Most importantly, if you have been already defrauded, then you are certainly not alone.
