Financial advisors can help fraud victims recover emotionally and protect themselves against future scams, according to a new guide on the advocates’ role in assisting victims.
The crime victim’s advocate should help the victim report the crime, set up protections for the future and work through the recovery process, says the report, entitled, Taking Action: An Advocate’s Guide to Assisting Victims of Financial Fraud. The guide, released today, was prepared by the National Center for Victims of Crime and the Finra Investor Education Foundation.
Some of the guide’s advice for advocates involves providing emotional support and reassuring the victim. The guide calls this creating a victim-centered approach. Advocates need to show compassion, listen actively and be sensitive to the victim’s fears and safety concerns, according to the guide.
Some 30 million Americans are the victims of financial fraud each year and many of them are older, according to recent studies. A recent Finra survey of people aged 40 and older found that 80 percent of them had been solicited for a potentially fraudulent scheme. At the same time, 40 percent of those surveyed could not identify the classic signs of fraud. A separate report by the Financial Fraud Research Center found that $40 billion to $50 billion is lost to financial fraud annually.
Victims may need assistance identifying the type of fraud they have suffered and help with reporting it to the proper authorities, the guide says. Reporting fraud is necessary even if it is a small amount because it helps authorities identify perpetrators and stop future fraud.
The victims also should be warned they may not get their money back. If they are anticipating a return of all the money, they might be disappointed and feel victimized a second time, the guide says.
Advocates should help people set up protective practices to prevent fraud, such as shredding all sensitive papers, monitoring checking and savings accounts weekly and using something other than a Social Security number for identification.
Advocates are advised to set up a network of contacts that can help victims of fraud, including law enforcement authorities and advocates for the aging.
The guide contains other advice for advocates, including financial advisors, who are often the first to suspect a fraud is being committed. It also contains a list of organizations and agencies that can assist. The guide is available at the Finra Foundation’s Web site at SaveAndInvest.org.