Protect Against Investment Fraud
Posted on August 1, 2012 by bob in Financial
Financial criminals know many seniors have accumulated considerable assets throughout their working years to fund a comfortable retirement. This makes them vulnerable to investment fraud, especially if their retirement savings are used to help make ends meet, or they want to recoup investments lost during a long term recession. Con artists may tempt seniors with the lure of “can’t miss” or “guaranteed” investment opportunities that promise to restore losses their nest eggs may have sustained. The time-honored principle that cautions, “. . . if it sounds too good to be true, it probably is,” is more true today than ever before.
Tips for Seniors
– Never make a financial decision based on a too-good-to-be-true offer, and never decide to invest at the time you hear a sales pitch. There is no deal worth risking your financial future on that won’t wait until you’ve had a chance to check it out with the Alabama Securities Commission (ASC; see contact information below).
– Learn to spot persuasion tactics used by scammers that get you to stop thinking logically and start thinking emotionally, especially promises that a particular investment will make you rich or that you must “act now,” before the offer disappears.
– Develop a refusal script; be prepared to say “NO,” and stick to it!
– Don’t think you’re too smart to get conned. A fast-talking salesman can make too-good-to-be-true offers sound like a sure bet.
– Ask yourself, “. . . is the investment opportunity I’m considering suitable for my long-term financial needs?” Suitable investments address specific circumstances such as your accumulated assets, income stream, investment goals, financial liabilities and especially tolerance for risk.
– Suitability depends on informed decision-making. The best way to make informed investment decisions is to accumulate as much information as possible before handing over a dime. Information is power!
– Always make sure the company, the salesman (agent) and the product are registered with the ASC, or exempt as to a particular product.
This information is free just by calling.
The less you understand about a financial product or the person offering it, the more susceptible you could become to fraud. Don’t invest in something you do not understand, did not go looking for and that may not fit your financial circumstances.
Providing financial and fraud prevention education to Alabama seniors is a priority for the ASC. The goal is to enhance financial knowledge to help seniors make informed decisions about investing, and to serve as an information “clearing house” so seniors can successfully recognize and avoid investment scams used by financial criminals.
Joseph Borg, Exec. Dir., ASC
Joseph Borg is Director of the Alabama Securities Commission. (This article is provided by a generous grant from the Investor Protection Trust, www.investorprotection.org.)
