Scams and Financial Exploitation
I once had an 81 year old client who came to me with two annuities that he bought in his very own living room about 2 years before. It so happened that two salesmen had come to his home and convinced him that these were appropriate products in which to invest his IRA and regular money. I reviewed these products. They had 12 year surrender charges, high fees and were unsuitable for this gentlemen. I wrote a scathing letter to the VP of the company and they returned the client’s money without any fees. This type of thing happens much more than we know. Sometimes people are unaware that they made such a mistake. If they realize their error in trusting these salesmen they are often embarrassed and do not wish to disclose it to their families.
These days exploitation of people and scams are running rampant. A study done by the Virginia Department of Criminal Justice shows that from 2001 to 2007, financial crimes increased almost 9 percent and for victims over 65 the increase was 18 percent. The State Department of Social Services is also reporting a large increase in exploitation of seniors and incapacitated adults. The majority of the cases involve caregivers and members of the family, normally people they would trust. When the exploitation is brought to light, often the elder wants to protect the son or daughter and does not want to press charges.
You do not have to be in your golden years to be a victim either. I recently read in the November issue of the AARP magazine an article called, “Confessions of a Con Artist.” The man was a pro at talking people into investing in situations where they could supposedly make mountains of money with very little risk! He also had a knack for getting into the emotional side of their lives and that spells trouble. Some of us could kick ourselves when we realize that we have allowed our greed to take control. Our greed keeps these guys in business. His victims were not uneducated people. The con man said he does not talk to “dumb” people…because they do not have the money. He would rather talk to doctors, lawyers, engineers, college professors, etc. because they have the money to spare and many of them did not mind writing him big checks with the promise of tens of thousands at the other end. He particularly mentioned selling “valuable” coins and the promise of strong appreciation.
What to do? Here are some pointers to stop this chain of scams and exploitations:
1. Buyer beware! Be sure you read all the fine print before moving forward with a financial product or investment scenario. Give yourself 24 hours if you just heard the sales pitch. Find out what’s in it for the salesperson. Are there commissions or kickbacks. Find out how are they compensated.
2. Do not give out personal information over the phone concerning yourself or your family! Tell the caller to send you something in writing if you are interested. Put yourself on their “do not call” list.
3. Review your parent’s bank statement if allowed and look for anything strange or out of place. If a trust is set up, maybe your parent would allow you to be co-trustee so you can be aware.
4. Do not deal with people selling things or services “door to door”.