Seminars to target elder scam prevention.

Byline: Bill Bishop The Register-Guard

Financial crimes cost victims an estimated $300 billion annually nationwide, and the actual loss may be much higher, says a state fraud expert coming here Thursday for five free seminars aimed at helping seniors protect themselves from scams.

Older people are especially vulnerable to investment fraud, said Vincent Galindo, director of investor information for the Oregon Division of Finance and Corporate Securities.

Investment promoters prey on financial insecurity created by stock market declines over recent years that have cut into the nest eggs of many seniors. The low interest rates paid on certificates of deposit also leave seniors vulnerable to scams that promise huge returns with little risk, he said.

"It's a big problem. Before they commit any money, we can give them the tools they can use to evaluate the investment," Galindo said.

The state securities agency is traveling the state with its 45-minute seminar describing the most common kinds of scams and providing phone numbers, Web sites and other resources to help would-be investors avoid frauds and ill-advised investments.

Pure financial scams - things such as pyramid schemes, phony loans and complex financial deals that deal out the investor - probably account for $40 billion in losses annually across the country. Galindo's agency estimates Portland-area investors lost $120 million last year in such scams.

"I'll bet you that number is double. When people get suckered, they are embarrassed. They don't report it," Galindo said.

One of the most insidious types of schemes is so-called "affinity fraud," in which a scammer preys on an investor's affiliations or ethnic identity. A smooth-talking scammer may join a church, coach children's sports teams or cater to particular ethnic groups to gain credibility and access to potential investors, Galindo said.

The first step to evaluate any investment is to check its registration and the license of the broker promoting it.

Galindo's agency registers virtually every legitimate security sold in the state and monitors brokers who are licensed to sell them. Verifying security registration and broker licensing does not ensure a safe investment, but it is the first step to detect fraud, he said.

"For the most part, if an unlicensed broker calls someone and is pitching an unregistered security, that is a big red flag," Galindo said. "If it's registered, at least you're on the path to legitimacy. Checking it takes a 60-second toll-free phone call to our office."

As always, investors should remember that an investment that sounds too good to be true probably is too good to be true.

"I'd say 90 percent of these start over the phone. The caller may be off-shore or in another state," Galindo said. "Generally, 95 percent of the time, it's outlandish claims. It's always `double your money in 12 months.' People need to know what questions to ask."

ANTI-SCAM SEMINARS:

State officials will conduct five free public seminars Thursday to offer tips to investors - particularly seniors - on avoiding fraudulent investment schemes. More information is available toll-free at [phone].

9:30 a.m., Lone Oak Assisted Living Community, 2615 Lone Oak Way, Eugene.

10:30 a.m., Gainsborough retirement center, 2555 Lansdown Road, Eugene.

Noon, Town Club, 975 Oak St., Eugene.

1:30 p.m., Fox Hollow Residential Care Community, 5320 Fox Hollow Road, Eugene.

3 p.m., Alpine Springs Assisted Living Community, 3760 N. Clarey St., Eugene.

AVOIDING SCAMS

The state Division of Finance and Corporate Securities and other sources offer many tips to help would-be investors avoid scams and bad investments.

The "Four Cs" of investing: Consider the options. Compare to other investments. Consult trusted advisers. Call the state agency to check credentials.

Stay in control of any transaction. Back out if there are red flags.

Unregistered securities and unlicensed brokers are major red flags. Call the state Division of Finance and Corporate Securities to check.

Take notes. Ask where the broker works, how to contact the broker, how the broker is compensated for selling the investment, whether the broker will consult with your own adviser. The biggest question is how the proposed investment fits your individual financial objectives.

Don't hesitate to call the state division with questions or to report possible scams.

More information: Division of Finance and Corporate Securities, www.oregondfcs.com, [phone]; state Department of Justice, www.doj.state.or.us, [phone]; U.S. Securities and Exchange Commission, www.sec.gov, 800-732-0330; National Association of Securities Dealers, www.nasdr.com, [phone]; North American Securities Administrators Association, www.nasaa.org, [phone].

- Oregon Division of Finance and Corporate Securities