Investment scams targeting seniors on the rise

The economic climate is ripe for investment scams. Such scams hit consumers of all ages, but seniors are particularly susceptible. The Better Business Bureau and the Financial Industry Regulatory Authority (FINRA) warns that older investors are being targeted with increasingly complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settlements and Ponzi schemes, all promising inflated returns. A viatical settlement is a transaction in which a life insurance policy holder sells his/her policy to a third party.

Opportunists who commit these scams know that seniors and others living on fixed incomes may have taken a hit in the past financial environment. Their products and pitches sound tempting to many seniors who have seen their retirement nest egg dwindle over the past few years.

Seniors, however, can educate themselves to avoid being taken. The Better Business Bureau, along with FINRA offers the following tips:

▪  Do not be a courtesy victim. Con artists will not hesitate to exploit your good manners.

▪  Check out strangers touting too good to be true deals. Trusting strangers is a mistake anyone can make when it comes to their personal finances. Extensive information on investment salespeople and firms is always available by checking with the securities division for your state or by using FINRA’s broker check at www.brokercheck.finra.org.

▪  Always stay in charge of your money. Beware of anyone who suggests putting your money into something you do not understand or who urges that you leave everything in his or her hands. Be extremely skeptical if the person promoting the deal says: “Don’t tell anyone else about this special deal!” A legitimate investment professional won’t ask you to keep secrets.

▪  Do not judge a book by its cover. Successful con artists sound and look extremely professional and have the ability to make even the flimsiest investment deal sound as safe and sound as putting money in the bank. The sound of a voice, particularly on the phone, has no bearing on the soundness of an investment opportunity.

▪  Watch out for salespeople who prey on your fears. Con artists know you worry about outliving your savings. Don’t let fear cloud your good judgment. An investment that is right for you will make sense because you understand it and feel comfortable with the risk involved.

▪  Monitor your investments and ask questions. Do not compound the mistake of trusting an unscrupulous investment professional or a con artist by failing to keep an eye on the progress of your investment. Insist on regular written or oral reports. Look for signs of excessive or unauthorized trading of your funds. If you are stalled when you want to withdraw your principal or profits from an investment, consider that a red flag.

▪  Do not let embarrassment or fear keep you from reporting investment fraud or abuse. Con artists know you might hesitate to report that you have been victimized in financial schemes out of embarrassment or fear. Every day you delay reporting fraud is one more day the con artist is spending your money and finding new victims.

For more information on seniors and investments, contact FINRA’s securities helpline for seniors toll free at 844-574-3577or visit their website at www.finra.org.

As always, you can also contact the Better Business Bureau at www.bbb.org.

This story was originally published May 9, 2016 at 11:45 AM with the headline "Investment scams targeting seniors on the rise."