TDCI’s Securities Division Raises Awareness of the Risks of Social Isolation and Loneliness on Senior Investors

NASHVILLE – The Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division is raising awareness of the risks posed to senior Tennessee investors that can arise from social isolation and loneliness.

Whether voluntary or involuntary, social isolation has long been a leading

factor contributing to the financial exploitation of older investors. While financial abuse can happen at any time, perpetrators often strike during times in a senior’s life when they might be more vulnerable, such as during a health crisis or after the death of a loved one.

“Social isolation and diminishing cognitive capacity can combine to affect the judgment and decision-making capacity of senior investors, which can make them more vulnerable to financial abuse,” said TDCI Commissioner Carter Lawrence. “Once a scammer has gained a victim’s trust, the scammer can wipe out a person’s entire life savings in the blink of an eye. I remind seniors and their caregivers to familiarize themselves with the common tricks and traps used by financial scammers in order to enact financial harm on senior investors.” 

To assist consumers, TDCI has published a new blog offering more information about ways consumers can protect themselves and their loved ones from scammers. Investigators have learned that scams can vary from traditional “pump and dump” style fraud to Ponzi schemes. Unfortunately, senior fraud is often underreported by victims due to embarrassment and lack of information about where to report fraud.

“If you suspect fraud or a questionable practice, don’t let embarrassment or concern that you’ll be judged incapable of handling your own affairs prevent you from filing a complaint with our team,” said TDCI Assistant Commissioner for Securities Elizabeth Bowling. “We are available to answer questions before you make an investment and to help you file a complaint if you suspect fraud.”

To help prevent being scammed, TDCI is reminding investors to learn the common red flags include:

• Unregistered and Unlicensed Sellers. Always check whether the person offering to sell you an investment is currently registered and/or licensed, even if you know them personally.
• Promises of High Returns with Little or No Risk. The promise of a high rate of return, with little or no risk, is a classic warning sign of investment fraud.
• Pressure to Buy Quickly. No reputable investment professional should push you to make an immediate decision about an investment or tell you that you must “act now.”
• Red Flags in the Financial Professional’s Background. Even if an investment professional is in good standing with their regulators, you should be aware of potential red flags in the professional’s background.

Questions about an investment? Contact TDCI's Securities Division online at tn.gov/securities, by email securities.1@tn.gov, or call 800-863-9117.