Senior Fraud WatchPosted on April 23, 2014 by ElderCare Resources in Blog, Caregiver Education, Education, Financial Services, Independent Living
Steps seniors can take to help protect against fraud
Protecting your retirement nest egg and sustaining your retirement income are challenging enough. When you add in the fears and concerns unique to older persons, it’s clear seniors should consider taking extra precautions to help guard their investments.
Older people can be common targets for fraud and financial crimes. Several qualities that are characteristics of older people tend to make them targets for scam artists and unscrupulous sales people.
Older people generally are trusting; they may be home alone during the day; they are accustomed to answering the door or the phone; and they may be reluctant to report fraud. Scam artists are aware of the common behaviors that make seniors susceptible to the methods unscrupulous people employ – including phone calls, emails, personal sales pitches and pop-up ads on the Internet.
Here are a few guidelines to follow that may help protect you or a loved one from financial fraud:
Proceed with caution: Don’t jump into an investment just because you have been approached through one of the communications tactics mentioned above. Before investing in any investment product or service, it is important you consider your overall financial situation to determine if it is right for you. You should be aware of your liquidity needs, fees and costs associated with an investment, as well as your income needs and the overall risk you can afford to bear with any investment.
Beware of misleading information: There is some wisdom to the old adage, “If it seems too good to be true ….” Offers of an investment with an above-average rate of return or income rate and little-to-no risk are almost always deceptive. Some representatives and salespeople may use scare tactics to get access to seniors’ savings and investments, such as the threat of physical or financial harm, intimidating statements, or recurring phone calls. Services described as a “limited-time offer” or any person who pressures you to make an immediate investment decision also should raise a red flag. Don’t be afraid to ask questions or to seek a second opinion. And beware of guarantees to make money or to achieve a guaranteed rate of return. Con artists often use promises of high returns to lure people into a financial scam.
Remember that few things in life are free: For example, seminar invitations that come with an offer of a free meal may seem appealing. Though many of these events are legitimate, some are not. Some of these seminars turn into high-pressure events where you may be given bad advice or be pressured to open an account that is not suitable for your financial situation. The cost of a free meal may be greater than you think if it results in you buying an unsuitable investment product.
Contact your law enforcement agency immediately if you suspect an individual or organization is employing fraudulent actions. Investment fraud can take many forms. There are Ponzi schemes, for example, where fraudsters advertise high rates of return on client investments. High payouts may continue until new investors are no longer available. Then the scheme and all the money disappear.
Other schemes have been reported, including pyramid schemes, scams involving coins and precious metals, ownership interests in oil and gas interests, viatical scams and affinity fraud through community groups, clubs and even places of worship.
A healthy skepticism is a wise strategy for seniors when approached by any person with a sales pitch.
Published: Northwest Herald