A new study shows that Seniors are being targeted for investment and lottery scams using various forms of psychological profiling. One member of the research team said that reading the transcripts of these calls was like "finding the con man's playbook".

Common tactics used to "con" seniors are:

• Credibility: Claiming to be from a known business (we see this locally where lenders use common names in their business name)
• Phantom wealth: Claiming that there is a prospect of wealth and riches.
• Social pressure: Examples of others who have invested.

The con artist will use different appeals for different situations. For example a recent widow may be targeted for lottery fraud, while a self-reliant male with some knowledge of finances is more likely to be the victim of investment fraud.

What's interesting is that the investment fraud victim tends to be married, more educated and with a higher income level than other types of fraud victims. They may make themselves more vulnerable by actually being willing to listen to the sales pitches. And they were also more willing to attend "free" seminars on investing.

In contrast, lottery victims are more likely to be widowed females over 75 years old and less educated. They are also likely to have had more negative life events than non-victims.

Also of note is that both lottery and investment fraud victims were willing to answer survey questions than non-victims. This of course makes these people more vulnerable to all sorts of sales pitches, both legitimate and fraudulent.

I have a client who was lured into refinancing out of a "silent second" where no payments were required until the home was sold into a second where current payments were required via one of these scams. She got "sold" on the sales pitch and the promise of extra money (cash out) and now she is in jeopardy of losing her home because she can't afford the extra payments. This seems to be getting more common with people using their current equity to finance their ordinary living expenses. They get in over their heads, and then are vulnerable to these fraudulent sales pitches.

If you have relationships with Seniors in your area, make sure that they know to talk with a qualified lender when considering refinancing rather than being the victim of one fo these schemes.

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