A dedicated phone line for senior investors that was launched in April 2015 helped uncover emerging scams and aided investors in recovering lost money, according to a report released last week by the Washington, D.C.-based Financial Industry Regulatory Authority (FINRA).
The FINRA Securities Helpline for Seniors has fielded more than 2,500 calls since its launch, and helped investors recover nearly US$750,000 in voluntary reimbursements from firms, the FINRA report says.
Calls to the helpline also enabled the regulator to identify several emerging scams, including frauds focused on tax schemes, bogus lottery winnings, and binary options, the FINRA report says, and it highlights several cases where investors avoided fraud, or had help recovering funds after they were scammed.
The FINRA report also details best practices that firms should consider implementing to protect seniors. In particular, it singles out the strong policies of one firm that it says is especially effective in protecting vulnerable investors. Among other things, the firm has: adopted mandatory annual training for all employees to help them recognize elder abuse, and set out the steps to take when abuse is suspected; established a centralized unit that coordinates the firm’s responses and client defense strategies for complex senior issues; and published and distributed educational materials to help investors protect themselves from possible scams.
“We trust that the information and effective practices discussed in this report will prompt firms of all sizes to assess their readiness to address the challenges that surface with some elderly clients,” the FINRA report says. “We hope that firms consider their size, retail client profile, product offerings, complaints or concerns raised by senior clients, the training of its workforce, and other factors in determining how to design and implement programs and controls to best serve this segment of the investing public.”
“FINRA created the helpline to provide assistance to senior investors for concerns they have with their brokerage accounts and investments, and I am incredibly pleased with the positive impact it has had in just a few short months. The helpline has also served as a tremendous source of information as we actively engage with seniors, learn of and respond to issues they are experiencing, and use this real-time intelligence to inform our regulatory programs and provide effective practices to firms,” says Susan Axelrod, executive vice president, regulatory operations, at FINRA, in a statement.