7/11/2011 11:05 AM ET|
Seniors getting scammed by seniors
So-called financial advisers target aging baby boomers with fraud schemes that aim to steal a piece of their nest egg. And often these con artists belong to the same age group.
The big wave of baby boomers retiring this year makes AARP's Jean Mathisen a little nervous. The program director for the group's Fraud Fighter Call Center expects her office to get more calls than ever about retirement-age investors being scammed, with their nest eggs the target. To add insult to injury, many of the so-called financial advisers doing the damage are aging baby boomers themselves.
It's a case of seniors scamming seniors.
"This problem has definitely been affected by the recent economy," Mathisen says. "Older investors may be tempted by opportunities to quickly recover money they lost when the stock market took a hit, and con artists see a great opportunity to hit easy marks."
These "easy marks" are not exactly who you might think they are, says John Gannon, the president of the Financial Industry Regulatory Authority's Investor Education Foundation. Today's senior victims aren't stereotypical elderly shut-ins who give money to scam artists who befriend them.
Instead, Gannon says FINRA's interviews of fraud victims indicate that the most likely senior targets are on the younger edge of the group -- 55 to 65 years old and primarily male, college-educated and financially savvy.
But these investors have a few foibles. "They're anxious for new, different financial answers," Gannon says. "They're looking for retirement income, and their mutual funds aren't performing as they'd like. Or they've been conservative investors in the past and are seeing that CDs and bond rates aren't working for them."
As a result, financial deals that offer even slightly higher-than-average returns have become tempting to this group. At the same time, there is a risk that some senior financial advisers, looking to improve their own financial situation after the recession, may be more aggressively pushing products or suggesting inappropriate investment choices for their clients, Gannon says. That can be a toxic combination.
FINRA research also discovered another common thread among seniors scammed by other seniors. "They're not likely to get a second opinion on an investment opportunity from their attorney or even their wife," Gannon says. "They're sure they know what they're doing."
Here's how to avoid being a victim of a senior-to-senior investment scam:
Check your adviser's credentials. Today's scammers may use titles like "certified senior financial planner" to make you believe they are uniquely qualified to assess your retirement needs. In reality, "many of those designations and letters behind their names don't tell you anything," says Pat Huddleston, the CEO of Investor's Watchdog and a former Securities and Exchange Commission enforcement branch chief. Investor's Watchdog is a for-profit investor protection firm that conducts research on brokers to help its customers avoid fraudulent investments.
According to Huddleston, some of these advisers' titles are fabrications, and others are flimsy. Advisers might qualify to use their titles after only attending a weekend course.
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OMG, Cabby1940 I can't believe Primamerica is still peddling their product. I was approached by one of my coworkers one day. She had overheard me saying I wanted to pick up a second job to make a little extra cash. She told me about this Primamerica company she was involved with so I checked them out at a free seminar. The guy on stage was just as condescending as could be, and his voice just dripped with derision when he spoke about all those people who get up and go to work every day. He never came out and said it directly, but the overall tone was that working for a living is a shmucks game for little people and losers.
What surprised me even more was that none of the people at the seminar with me had any experience in the financial services industry. When I asked him about this, the seminar leader told me that we would take classes to get certified. I left because something just didn't feel right. I think someone who wants to advise people on what to do with their life savings should at least have a college degree and a few years of apprenticeship with a legitimate company. I simply didn't like their attitude. Their is nothing wrong with working at a job to earn money. Without those working people getting up everyday and doing their job this country would not function. It seemed like an easy money scheme to me. But that's just my opinion.
I agree our political climate right now is more like a traveling circus or carnival show. And the one thing that galls me most is the way they are trying to pit average people against one another in a giant blame game. They pick on the people who actually do the work to make our society what it is by earning and spending. I will never forgive them for their attacks on teachers and union workers who just want a decent livable wage. Since when did wanting to earn enough to live on become a crime? And the biggest disappointment of all has been the behavior of the American people in buying into this ****.
If there is one thing that I have learned from this period in my life it is that most people are selfish, stupid, bullies who want everything for themselves and do not care what happens to anyone else. If America goes down it will because of the behavior and attitudes of our own people. I cannot believe the hurtful, disrespectful comments I have heard coming out of the mouths of ordinary people when they are talking about their own kind.
Make no mistake about it, their is a God and he has knows what is in our soul. Right now America is being brought low by the moral rot of greed and selfishness. Do you think for a moment those companies who offshore good-paying jobs overseas care about you or America? Do you think those politicians that allow them to offshore American jobs while collecting huge tax breaks care about your bottom line? We have sold out our own country and our own people. I can't believe it when I hear people criticize workers for wanting a pension and health benefits. Truth is without those millions of average workers getting up everyday to go to work there would be no America as we are finding out now. Think about that the next time you shooting off your mouth about how the owners of a company can do whatever they want because it's their company. Their company can replace any one single worker, but they cannot replace the contributions of millions of those same workers who make this country and world a decent place to live in.
The Lord knows the truth, and he will continue to punish us until we learn.
Like most boomers , I don 't see myself as old as I am. The sad part is trying to figure out who we can trust.... When it comes to boomers investing trust worthy is what we want. Yet the reality of the times is showing us scams can be run by anyone. Just because boomers are aging it doesn't mean they are honest, nor does it mean they ever were.
What boomers don't want is to be seen as old people, it simply doesn't fit our younger profiles. So perhaps there is ego involved as we deal with our generation, we all talk the same lingo, it seems easier to trust people we think are coming from the same place. But yet once plastic, perhaps always plastic. There are some top notch young people out there, we simply have to get past calling them kids.
In an interview last night one of the biggest gamblers in Vegas said he was ripped off much more consistently when he invested on Wall St compared to his returns when betting in Vegas.
At least in Vegas the folks he dealt with were honest enough to actually call it gambling.
One of the comments he made was quite insightful: "When you are looking around the room for the mark and do not see one, you are the mark."
I for one do not plan on exposing myself to the markets as long as the politicians are playing russian roulette with the gun pointed at our head. Especially when the gun is fully loaded.
more proof that baby-boomers are the worst generation this country (possibly any country) has EVER produced....I think not, Sofa King--I'd say each generation has progressively gotten worse, has felt more entitled, and has wanted more and more for less and less work. If you're not part of the solution, you're part of the problem.
you mean, that the 'selling out' part of the equation is now so complete that now they rob from other baby-boomers, in addition to their children (see deficit spending and social security shortfalls)?
more proof that baby-boomers are the worst generation this country (possibly any country) has EVER produced....
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