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Seniors Find Themselves More Susceptible to Fraud

By George Chamberlin, 05.07.2017 Financial Education
seniors discuss their finances with financial advisor Seniors Find Themselves More Susceptible to Fraud

A report from the Investor Protection Trust finds that nearly 7 million seniors have “been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees on financial services or outright fraud.”
 

I recently spoke to a group of senior citizens in San Diego County. Most of them were retired, living off of Social Security and other types of pension programs.
Before retirement, they assumed the returns from these investments would be enough to make ends meet. Unfortunately, in many cases, this is not the case. 

Retirees face various financial threats

Report after report may say inflation remains very low. The return on deposit accounts and other income investments confirm that. Yet, the real world—especially, in Southern California—shows the cost of living is significantly higher than reported.
This puts seniors in a difficult position. They try to seek out higher rates of return on their investments, without acknowledging a higher amount of risk. This leaves them wide open to scams, frauds and rip-offs.
A report from the Investor Protection Trust finds that nearly 7 million seniors have “been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees on financial services or outright fraud.”
Some would suggest the number of victims is significantly higher, and the dollar amount of fraud is well above the conservative suggestion of $8 billion a year. Many victims might not report the crime because they are embarrassed and feel their family would think they can no longer handle financial matters.

Ways for seniors to avoid financial fraud

There is no simple answer to this problem. Government and industry regulators make plenty of resources for seniors to check a person selling them an investment product with promises of no fees and no risk. The Financial Industry Regulatory Authority provides a background check and long list of Investor Alerts on a variety of subjects.
But common sense is always the first line of defense. As goes the old adage, “If it sounds too good to be true, it probably is.”

 

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