Monday, August 10, 2009
Getting Conned at Retirement
The Worry
While everyone is at risk for fraud, retirees often face greater risks, as there is a growing number of scam-artists who target retirees. These scam artists hope that the retiree is not only home most of the time, but home alone. This increases the likelihood of them being able to pitch a scam when relatives are not around. (To read more on this topic, see What Is A Pyramid Scheme?, The Biggest Stock Scams Of All Time and the Online Investment Scams Tutorial.)
The Risks
According to Consumer Action, "senior citizens aged 60 and older comprise 15% of the U.S. population, yet they are estimated to make up 30% - nearly one-third - of fraud victims." The North American Securities Administrators Association (NASAA) has dedicated an area of its website to exposing schemes designed to fleece senior citizens of their savings. Unfortunately, in many cases the losses are unrecoverable. Many of the individuals who prey on senior citizens portray themselves as investment professionals with the proper licenses. However, in many cases, they are unlicensed, and/or lack the experience necessary to properly service investors.
In many cases, retirees have paid unscrupulous contractors for work that was never done (or shoddily done), invested in Ponzi schemes and have been generally defrauded by individuals they believed they could trust.
Sadly, family members, relatives and individuals who are supposed to be friends are also sometimes guilty of taking advantage of elderly retirees by abusing the authorities with which they are entrusted, such as using a power of attorney to conduct transactions that are not consistent with the retiree's goals and objectives, or even defrauding the retiree.
The Solutions
Avoid investments that seem too good to be true - usually, they are. Retirees should also check into the background of an investment professional before agreeing to have that person manage investments. One resource is the NASAA, which hosts a Senior Investor Resource Center dedicated to educating seniors on how to protect their nest eggs. Information is also available at the NASD's and SEC's websites.
Check into the background of other service providers, including contractors for home-improvement projects. This information is usually available on state, county and/or town websites.
Ensure that more than one trusted relative or family member is kept abreast of relationships with investors and other service professionals. When family members or relatives are placed in charge of financial affairs, establish a structure in which they are required to provide frequent updates to a party that has only a professional interest in the retiree's affairs, such as an attorney..
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Comments? Feedback? Questions? Let me know...Thanks..
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While everyone is at risk for fraud, retirees often face greater risks, as there is a growing number of scam-artists who target retirees. These scam artists hope that the retiree is not only home most of the time, but home alone. This increases the likelihood of them being able to pitch a scam when relatives are not around. (To read more on this topic, see What Is A Pyramid Scheme?, The Biggest Stock Scams Of All Time and the Online Investment Scams Tutorial.)
The Risks
According to Consumer Action, "senior citizens aged 60 and older comprise 15% of the U.S. population, yet they are estimated to make up 30% - nearly one-third - of fraud victims." The North American Securities Administrators Association (NASAA) has dedicated an area of its website to exposing schemes designed to fleece senior citizens of their savings. Unfortunately, in many cases the losses are unrecoverable. Many of the individuals who prey on senior citizens portray themselves as investment professionals with the proper licenses. However, in many cases, they are unlicensed, and/or lack the experience necessary to properly service investors.
In many cases, retirees have paid unscrupulous contractors for work that was never done (or shoddily done), invested in Ponzi schemes and have been generally defrauded by individuals they believed they could trust.
Sadly, family members, relatives and individuals who are supposed to be friends are also sometimes guilty of taking advantage of elderly retirees by abusing the authorities with which they are entrusted, such as using a power of attorney to conduct transactions that are not consistent with the retiree's goals and objectives, or even defrauding the retiree.
The Solutions
Avoid investments that seem too good to be true - usually, they are. Retirees should also check into the background of an investment professional before agreeing to have that person manage investments. One resource is the NASAA, which hosts a Senior Investor Resource Center dedicated to educating seniors on how to protect their nest eggs. Information is also available at the NASD's and SEC's websites.
Check into the background of other service providers, including contractors for home-improvement projects. This information is usually available on state, county and/or town websites.
Ensure that more than one trusted relative or family member is kept abreast of relationships with investors and other service professionals. When family members or relatives are placed in charge of financial affairs, establish a structure in which they are required to provide frequent updates to a party that has only a professional interest in the retiree's affairs, such as an attorney..
.
Comments? Feedback? Questions? Let me know...Thanks..
.
.
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