Shadel details different types of scams in his new book, including oil and gas schemes, foreign lotteries, religious Ponzi schemes, and movie investment deals.
Last year, an AARP Foundation study examined the cases of 723 fraud victims. According to Shadel, "The average investment fraud victim was 64 years old, more likely to be male, have higher income and to have higher levels of education than the general public."
The elderly are often victims of con artists, and they can often least afford the financial loss. As Walt Sheppard said, "I don't know of anyone, or any group of people who could be hurt more than the older people who are maybe hoping to get a little boost out of it. The thing I think about is this -- at 80 years old you don't have a way to come back."
So when that persuasive-sounding sales person calls you with the deal of a lifetime, what can you do to avoid being swindled?
Shadel has five key pieces of advice.
First, as noted earlier, don't make financial decisions "under the either."
Second, learn to spot persuasion tactics. Some of those used by con artists include promises that this deal will make you rich, and assurances that what you're about to buy is so scarce you have to purchase it up immediately. Shadel says another common tactic is to promise there's a wealthy investor waiting in the wings to snap up your purchases at a big mark-up. Don't believe it, he says.
Next, Shadel advises, "Develop a refusal script." He says many potential investors have trouble hanging up because they don't want to be rude to the salesman on the other end of the phone. Memorize and practice a simple line to allow you to hang up quickly. One of his suggestions: "I'm sorry. This is not a good time. Thank you for calling." Then make sure you put down the phone before the salesman can get another word in.
Fourth, before you buy, check to see if the company is registered with the state or federal governments. Are they licensed by the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or state regulators?
Finally, beware if you're under financial stress at home or on the job. You are more likely to jump at the chance to make a quick buck.
We've all heard, "If it sounds too good to be true, it is." But even those who know that maxim by heart have been taken in. As Shadel found out, "Everyone thinks they're too smart to fall for a scam, but it's not about intelligence." When you're "in the ether," and overly excited about the opportunity to make money, a fast-talking salesman can make offers that are "too good to be true" sound like sure bets.