Invest Wise Washington

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					   Invest Wise Washington
A Campaign to Protect Washington Consumers


 Campaign Report – July 2007




              www.aarp.org/wa
              www.dfi.wa.gov
                                          Invest Wise Washington
                                         A Campaign to Protect Washington Consumers
                                         AARP / Washington State Department of Financial
                                         Institutions / Investor Protection Trust

Save, Manage, Protect

Have you ever received a “great offer” or a “hot tip” on an investment from someone? It may
have been from a broker your friends swear by, an insurance agent you’ve known for years,
or from a persuasive financial advisor. The “can’t lose,” “no risk” shots at instant wealth may
sound too good to be true. Unfortunately, most of them are.

To have a secure and comfortable retirement, each of us should plan to invest. But there’s a
difference between investing and gambling. Often, that difference may come down to the
homework we do before we put our money on the table. Knowing who and what to look out
for, as well as what types of investments are right or wrong for each of us, can help us make
wise and safe investment decisions.

To help protect Washington investors, AARP teamed up with the Washington State
Department of Financial Institutions (DFI) to launch the “Invest Wise Washington” campaign.
More than 1,000 consumers attended a series of public information events in Spokane,
Kennewick, Lynnwood and Vancouver.

Experts in wise and safe investing helped consumers learn how to better prepare for their
financial futures, while avoiding some of the most common investment scams. Attendees
also learned how to pinpoint the tricks and tactics used by crooks and scam artists.

Armed with the latest information about wise and safe investing, attendees are now fanning
out across the state sharing the information with their families, friends and communities.
They’re visiting civic organizations, community clubs and faith-based organizations, providing
Invest Wise presentations and distributing educational materials. As of July 2007, more than
2,700 “Invest Wise Washington” toolkits had been distributed statewide.

Trained volunteers from AARP’s Fraud Fighter Call Center have also contacted thousands of
consumers in Washington state with tips on wise and safe investing.

The following report provides a snap-shot of the “Invest Wise Washington” campaign,
including campaign contacts, a sample event agenda, attendee evaluations, highlights from
AARP’s survey “Stolen Futures,” an overview of campaign media coverage and a sampling of
campaign materials.

Thank you to our local community partners, and to the staff and volunteers from AARP, DFI
Bellevue Community College and the Investor Protection Trust for their expertise and
commitment to consumer protection as part of the “Invest Wise Washington” campaign.



For additional copies of this report, contact AARP Communications Director Jason Erskine at 206-517-9345 or
by email at jerskine@aarp.org.
Invest Wise Washington
Campaign Contacts

AARP
Doug Shadel                Cheryl Reed                       Jason Erskine
State Director             Community Outreach Director       Communications Director
206-517-2316               (Campaign Manager)                (Communications, Media
dshadel@aarp.org           206-517-9389                      Relations)
                           creed@aarp.org                    206-517-9345
                                                             jerskine@aarp.org

Susan Schindler            Bruce Carlson                     Karla Pak
Program Coordinator        Program Coordinator               Program Coordinator (Survey,
(Volunteer coordination,   (Video, web, photos)              promotion)
promotion)                 206-517-2313                      206-517-9388
206-517-2327               bcarlson@aarp.org                 kschweitzer@aarp.org
sschindler@aarp.org

Jean Mathisen              Crystal Bell                      Lauren Moughon
AARP Fraud Fighter Call    Senior Operations Administrator   Advocacy Director
Center                     206-517-9355                      (Presenter)
206-517-9353               ctbell@aarp.org                   206-604-6781
jmathisen@aarp.org                                           lmoughon@aarp.org

Bill Iulo                  John Barnett
AARP Volunteer             AARP Volunteer
(Presenter)                425-889-0207
206-842-7076               Ybjb1@verizon.net
wiulo@comcast.net

Department of
Financial Institutions
Scott Jarvis               Martin Cordell                    Kristin Culbert
Director                   Chief of Enforcement              Financial Legal Examiner
360-902-8707               360-902-8772                      360-902-8770
sjarvis@dfi.wa.gov         mcordell@dfi.wa.gov               kculbert@dfi.wa.gov

Jeremy Lushene             Mike Stevenson                    Scott Kinney
Web design and             Director of Securities            Communications Director
development                360-902-8824                      (former)
360-902-0506               mstevenson@dfi.wa.gov
jlushene@dfi.wa.gov

Bellevue Community
College
Leslie Lum
Faculty
(Presenter)
425-564-4063
llum@bcc.ctc.edu
                     Sample event agenda
9:30    Welcome, Introductory Remarks and Introductions
        Master of Ceremonies – Doug Shadel, AARP State Director
        Martin Cordell, Chief of Enforcement, Department of Financial Institutions
        Bill Iulo, AARP Volunteer & Retired Professor of Economics at Washington
        State University

9:45    Stolen Futures – Video

10:00   Investment Quiz
        Bill Iulo, AARP Volunteer

10:15   Washington State Investor Education Research
        Doug Shadel, AARP State Director

10:30   Roadmap for Investing Wisely
        Leslie Lum, Faculty, Bellevue Community College

11:15   Break

11:30   Investment Scams, Schemes and Fraud
        Martin Cordell, Chief of Enforcement, DFI
        Kristen Culbert, Financial Legal Examiner, DFI

12:00   Lunch

12:30   Persuasion Tactics that Target Investors
        Doug Shadel, AARP State Director

1:15    Ask the Experts - Panel
        Leslie Lum, Faculty, Bellevue Community College
        Martin Cordell, Chief of Enforcement, DFI
        Kristen Culbert, Financial Legal Examiner, DFI

1:45    Fight Investment Fraud
        Bill Iulo, AARP Volunteer

2:00    Complete Evaluations & Sign-Up for Fraud Alerts
Attendee evaluations
More than 1,000 people attended four “Invest Wise Washington” events in Spokane,
Kennewick, Lynnwood and Vancouver.

Attendees ranged in age from 30-75, with the majority aged 60-69 (41%). Twenty-two
percent of attendees were aged 50-59, and 25-percent were 75 years-of-age or older. The
majority (82%) of attendees indicated that they were AARP members.

According to written evaluations, attendees were extremely impressed with the content and
expertise they received. On a scale of 1 to 5 (with 5 being the highest and 1 being the
lowest), attendees gave the following ratings:

   •   Presenters: 4.42
   •   Panel: 4.35
   •   Campaign Materials & Resource Packet: 4.51

Attendees were also eager to share the information with their families, friends and
communities. Over half (59%) said they will share the information with one-to-five people,
16-percent of attendees said they would reach out to six-to-ten people, and 14-percent said
they would share what they learned with ten people or more.

Here is just a sampling of the comments received on our feedback forms:

“Very informative program. Appreciated the information from experts in the fields of
investments and fraud.”

“We have an appointment with a financial advisor on Friday. I feel much better prepared
now. Thank you for all the great information. We will be calling to check on his status, etc.,
now and I hadn't considered this before. Thank you!”

“This has been the most relevant group presentation that I have been to.”

“Excellent presentation and great information – so glad we came.”

“Wonderful presentations & information – thank you!”

“Great, well-informed professionals.”

“Very worthwhile presentation, well done, good information.”

 “Well organized, well executed & informative. Sound good, visuals and materials good,
location good. A+ good job!”

For more information about campaign materials or presentation content, contact AARP Outreach Director Cheryl
Reed at 206-517-9389 or by email at creed@aarp.org. For copies of the DVD program, “Stolen Futures,”
contact AARP Program Coordinator Bruce Carlson at 206-517-2313 or by email at bcarlson@aarp.org.

A special thanks also goes to the AARP Financial Security Team.
                                      Your “Invest Wise” Checklist
                                      Six steps to wise and safe investing




1. Protect your personal information
   Do not give your personal information to any investment professional until you have
   done your research and decided to make an investment. Be especially wary of cold
   calls or unsolicited mail.

2. Take your time
   Never make a snap decision when it comes to investing. Good investment
   opportunities will still be around tomorrow. Anyone who tries to rush you into a “Get
   Rich Quick” offer doesn’t deserve your trust, or your money.

3. Ask questions
   Find out as much information as you can about the product, the person selling it, and
   the firm or company they represent. Then be sure to verify the information.

4. Do your homework
   Never rely solely on the salesperson’s word. Investigate any investment yourself
   through independent sources such as the Washington State Department of Financial
   Institutions.

5. Be wary of free offers
   It may sound cliché, but it’s true. There’s no such thing as a free lunch.

6. Report investment fraud
   If you have a problem, file a complaint with the Washington State Department of
   Financial Institutions. Fill out an online complaint form at www.dfi.wa.gov, or call
   1-877-RING-DFI (1-877-746-4334).




                                    www.aarp.org/wa
                                    www.dfi.wa.gov
                                 Beating Cons at Their Own Game
                                 Five of the most common persuasion tactics used in
                                 investment fraud
In 2005, the National Association of Securities Dealers (NASD) Investor Education
Foundation commissioned a fraud study to learn about the kinds of persuasion and social
influence tactics con artists use to defraud consumers. An influence tactic is anything that a
con artist does to persuade a victim to voluntarily hand over their money. As a consumer,
understanding these “tricks of the trade” is like reading the con artist’s playbook. Here are
five of the most common persuasion tactics used by con artists in investment fraud pitches:

•   Source Credibility: Claiming to be from a well-known or legitimate business
Con artists often attempt to establish personal credibility or the credibility of the firm where they are
employed. They might mention various certifications, claim to be bonded or in business for a long
period of time, or say they have well-established companies as business partners. This tactic is used
to get the potential victim to trust the con artist or the company and therefore be less suspicious of
potentially fraudulent activities.


•   Phantom Fixation: Dangling the prospect of wealth and riches
A phantom is an item that is completely unavailable, but that you would desperately like to have, such
as ten million dollars, a motor home, or a vacation that never ends. Phantoms appeal to one or more
of our basic desires: health, wealth, popularity, and avoiding death. The con artist will dangle the
phantom out there as part of the pitch so that you will become so fixated on it that you can’t think of
anything else and will do anything to obtain it.


•   Social Proof: Showing examples of others who have invested and been successful
Based on the simple rule that if everyone is doing something, then it must be good. The consensus of
others is social proof that it is a good idea. This tactic is also known as “getting on the bandwagon.”


•   Scarcity: Making an object sound scare or rare to increase its perceived value
Three types of scarcity commonly found in investment fraud pitches include:
   Product Scarcity: the idea that a given product or item is scarce.
   Time Scarcity: creating a sense of urgency by claiming that a decision must be made quickly.
   Fear-of-loss or take-away scarcity: the idea that “the special offer” could be taken away.


•   Friendship: Changing the relationship from salesman to friend
If the con artist becomes your friend, the social rules change. Friends share values, look out for each
other, and are on the same team. Friends also tend to trust one another. If a con artist can create a
sense of friendship, he can make the victim believe that he would never do anything that would hurt
them.
Stolen Futures: A survey of Washington investors and victims of
investment fraud (March 2007)

To gain a better understanding of who investment fraud victims are and why they are
victimized, AARP surveyed a sample of investment fraud victims in Washington state and
compared the results with other Washington investors. The survey revealed some surprising
findings.

Survey Highlights
    Investment fraud victims do not fit generally accepted stereotypes. Investment fraud
    victims are more likely to be male (victim: 64%; non-victim: 43%), married (victim 77%; non-
    victim: 67%), and employed (victim 64%; non-victim: 53%). Victims of investment fraud were
    on average 55 years old.

    Washington investors overall flunked a standard battery of financial literacy questions.
    Respondents from both samples combined did not know the correct answer to half of the six
    financial literacy questions included in the survey. Victims of security fraud answered
    significantly more questions correctly than did non-victims (victim: 56%; non-victim: 51%).

        Only two in ten respondents in each sample correctly identified a feature of no-load
        mutual funds (victim: 22%; non-victim: 18%). Few respondents in either group knew
        which security yields the highest rate of return (victim: 56%; non-victim: 48%), how
        diversification alters the risk of losing money (victim: 54%; non-victim 46%), or how bond
        prices change with interest rates (victim: 44%; non-victim: 41%). However, most
        respondents in both samples knew about compound interest (victim: 83%; non-victim:
        82%) and the rate of return paid out by mutual funds (victim: 78%; non-victim: 71%).

    Victims of investment fraud are more likely to respond to persuasion and influence
    tactics typically used by con artists. After being presented with a series of statements
    often associated with fraudulent investment opportunities, victim respondents are less likely
    than non-victims to say they are “not at all interested in hearing more.” For example:

        “This investment made hundreds of people extremely wealthy.” (victim: 58%; non-victim: 73%)
        “There is no way to lose on this investment- it is fully secured.” (victim: 61%; non-victim: 70%)
        “The lowest return you could possibly get on this investment is 50% annually, but most
        investors are making upwards of 110% a year.” (victim: 52%; non-victim: 62%)

    Among those respondents who invest through a professional, only about one-third say they
    have ever checked the background of that broker, financial planner, or financial advisor to see
    if they are registered with a national or local securities regulator before hiring them (victim:
    37%; non-victim: 32%). Additionally, less than two in ten report checking the background of
    the financial professional to see if they have broken any laws or rules related to their
    profession before hiring them (victim: 19%; non-victim: 18%).


For more information about this survey, contact AARP Program Coordinator Karla Pak at 206-517-9388, or by
email at kpak@aarp.org.

A special thanks also goes to Jennifer Sauer in AARP’s Knowledge Management department.
Media Report

Each “Invest Wise Washington” event received significant media attention resulting in:

   •    Coverage on 14 television stations (more than 45 stories total);
   •    More than 20 newspaper articles;
   •    And coverage on more than 45 radio stations in Washington state, in addition to a
        radio news report released to 460 News/Talk stations in the country.

In addition, an AARP/DFI produced television ad offering the “Invest Wise toolkit” ran
extensively following the Spokane and Kennewick events. Radio ads offering the kit aired in
all four markets.

The following report lists media hits by event, followed by copies of select news clips. DVD
copies of all television reports and hard copies of print stories are available by request.
Please contact AARP Communications Director Jason Erskine with any questions at
206-517-9345 or by email at jerskine@aarp.org.


Spokane

   • Spokesman Review
   March 15, 2007 / Front page of Business section
   “Fraud Victims Defy Stereotyping – Seminar offers help on recognizing scams”
   http://www.spokesmanreview.com/business/story.asp?ID=179290#infobox

   • KXLY-AM
   Spokane news radio
   March 14, 2007 / Three live interviews from event (with AARP and DFI)

   • Washington News Service
   March 15, 2007 / “Protecting Fragile Nest Eggs from Investment Fraud”
   Picked up by 38 Washington state radio stations, and distributed nationwide to an
   additional 460 News/Talk stations.

   • Senior Times
   March 2007 / Circulation: 60,000
   “AARP, DFI launch campaign to protect consumers”


                                  Senior Times
                                  April 2007 / Circulation: 60,000 / With photo
                                  “Financially Savvy More Likely to Fall for Scams”



   (Photo: Bruce Carlson, AARP)
Tri-Cities

                                 KVEW-TV (ABC, Kennewick)
                                 April 4, 2007
                                 “Seminar Teaching How to Prevent Getting Scammed”
                                 http://www.kvewtv.com/news/?sect_rank=1&section_id=1&story_id=2015


                                  KAPP-TV (ABC, Yakima)
                                  April 4, 2007
                                  “Investing Wisely”




                                  KNDU-TV (NBC, Kennewick)
                                  April 4, 2007




                                  KNDO-TV (NBC, Yakima)
                                  April 4, 2007
                                  “Investment Fraud Campaign”




  • Tri-City Herald
  April 4, 2007 / Front page of Business section, banner headline
  “AARP class can keep you from being scammed”
  http://www.tri-cityherald.com/tch/business/story/8763982p-8665639c.html

  • Central Washington Senior Times
  March 2007 / Circulation: 16,000
  “AARP, State Team Up for Fraud-prevention Program”


                                 Central Washington Senior Times
                                 April 2007 / Circulation: 16,000 / Front page article with two photos
                                 “Tri-Cities Seniors Learn About Investment Scams”


  (Photo: Bruce Carlson, AARP)
Tri-Cities continued

  • KONA-AM
  Tri-Cities news radio
  April 4, 2007
  Five live interviews from event (w/ AARP, DFI, and Bellevue Community College)

  • CityView TV
  Richland Government Access
  Aired “Stolen Futures” program multiple times


Lynnwood


                    KING-5 TV (NBC, Seattle)
                    May 16, 2007




                    Q-13 TV (FOX, Seattle)
                    May 18, 2007
                    Ten minute interview with AARP State Director Doug Shadel and Dick
                    Mansfield (local investment fraud victim)


                    KIRO-7 TV (CBS, Seattle)
                    May 16, 2007




  • Seattle Post Intelligencer
  May 18, 2007 / Front page of Business section, banner headline
  “Victimized but still investing - Those defrauded once often duped again, study says”
  http://seattlepi.nwsource.com/local/316422_invest19.html

  • News Tribune
  Tacoma, WA / May 7, 2007
  “Invest Wise warns about frauds, con men”
  http://www.thenewstribune.com/506/story/56493.html
  • The Herald
  Everett, WA / May 17, 2007 / Front page of Business section, banner headline
  “Too savvy for scams? Think again”
  http://www.heraldnet.com/stories/07/05/17/100bus_scams001.cfm
Lynnwood continued

  • KUOW-FM (NPR)
  May 30, 2007 / “Scam Watch: Persuasion Literacy” / The Conversation
  40-minute live interview with AARP State Director Doug Shadel
  http://www.kuow.org/programs/theconversation.asp

  • The Seattle Medium
  Seattle, WA / May 2, 2007
  “Too good to be true? – DFI and AARP to Offer Free Investor Education Event”
  http://seattlemedium.com/News/article/article.asp?NewsID=78394&sID=13&ItemSource=L


                                 The Seattle Medium
                                 Seattle, WA / May 23, 2007 / With photo
                                 “How to Spot and Stop Investment Fraud”
                                 http://seattlemedium.com/news/Article/Article.asp?NewsID=79005&
                                 sID=4&ItemSource=L

  (Photo: Bruce Carlson, AARP)


  • Journal Newspapers
  June 5, 2007
  Weekly paper with seven editions mailed to King and Snohomish County neighborhoods
  Circulation: 83,000
  “Avoiding Financial Scams”

  • Enterprise Newspapers
  June 15, 2007
  Lynnwood, Mount Lake Terrace, Edmonds, Mill Creek, Shoreline, Lake Forest Park
   “Experts: preparation, awareness key to avoiding scams”
  http://www.enterprisenewspapers.com/index.cfm?Action=story&StoryID=20076141663163&ArchYear=

  • KOMO-AM news radio
  Seattle, WA / May 17, 2007
  Four live interviews from event (with AARP, DFI, and Bellevue Community College)

  • KRIZ-AM / KYIZ-AM
  Seattle, WA / May 11, 2007
  Ten-minute live interview with AARP State Director Doug Shadel

  • Northwest Prime Time
  King County / April 2007
  Circulation: 50,000
  “Too good to be true?”
Vancouver
                     KATU-2 TV (ABC - Portland, OR)
                     June 20, 2007
                     “2 On Your Side: Investment Scams”
                     http://www.katu.com/news/consumer/8100592.html


                     KGW-8 TV (NBC, Portland, OR)
                     June 20, 2007
                     “AARP Helps with Money Scams”
                     http://www.kgw.com/business



  • The Columbian
  July 2, 2007 (two articles) / Front page of Local section, with photo
  “Investors Can Learn to Dodge Scammers”
  http://www.columbian.com/news/localNews/07022007news161131.cfm
  ”Investors Show Big Gaps in Information”
  http://www.columbian.com/news/localNews/07022007news161291.cfm

  • Associated Press
  Oregon / June 20, 2007
  “Wash. officials: Financially savvy more likely to fall for scams”
  Sent to over 75 television and radio outlets in Oregon and SW Washington
  http://www.ktvz.com/Global/story.asp?S=6686206

  • KEX-AM
  Portland news radio
  June 20, 2007
  Four one-minute interviews (with AARP, DFI and Bellevue Community College)

  • Clark-Vancouver Television (CVTV)
  Government Access
  Coverage of entire program aired multiple times in June and July
  http://www.cityofvancouver.us/cvtv/cvtvindex.asp?catID=999&titleID=886

  • TVW
  Washington State Public Affairs Network
  Coverage of entire program aired multiple times July

  • The Daily Insider
  Online newsletter for SW Washington
  June 15 / “AARP offering consumers free seminar on how to get wise to investment scams”

  • Senior Messenger
  Article planned for August 2007
  Circulation: 14,500
Miscellaneous

  • AARP Bulletin
  April 2007 / “Caution: Hot Tips”
  Mailed to over 910,000 AARP members in Washington state, and also to AARP members
  in ten other western states (AK, AZ, CA, OR, HI, MT, NV, ID, UT, WY)
  http://www.aarp.org/states/wa/wa-news/regional_news_from_the_aarp_bulletin.html

  • AARP Bulletin
  July 2007 / “Scam Savvy”
  Mailed to over 910,000 AARP members in Washington state, and also to AARP members
  in ten other western states (AK, AZ, CA, OR, HI, MT, NV, ID, UT, WY)
  http://www.aarp.org/states/wa/wa-news/regional_news_from_the_aarp_bulletin.html

  • AARP Washington Update
  Spring 2007
  “Stolen Futures: AARP and Washington State DFI Launch Education Campaign”
  Front page article with photo
  Mailed to over 125,000 AARP members in Washington state
  www.aarp.org/wa

  • AARP Washington Update
  Summer 2007
  “Financially Savvy People Fall for Scams. Are You Next?”
  Mailed to over 125,000 AARP members in Washington state
  www.aarp.org/wa

				
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