Common Scams Targeting Nest Eggs
1 in 5 …
the number of citizens over the age of 65 that have already been the victim of a financial fraud, according to a new Investor Protection Trust (IPT) survey. Scams are a common complaint from ELA’s clients. Karin Schumacher, Esq. ELA Staff Attorney for Legal Services discusses the most common scams ELA clients fall victim to:
Distressed Real Estate Scheme
A rising danger following the collapse of the real estate bubble, con artists convince seniors to invest their life savings into a real estate project with promises of high returns. The investment is lost while the companies and people who profited claim bankruptcy.
Hundreds of versions of this scam exist with new ones constantly emerging. An email is sent claiming a large winning in an international lottery, even though no ticket was purchased. The scammers request personal information and money sent to foreign account to cover the costs of transferring the winnings. Operating outside the US there is no jurisdiction to prosecute these swindlers. Check the website Hoaxslayer for an up-to-date list of the newest iterations of the scam.
Gold and Precious Metals
Where there is an air of quick profits, a swindler will exploit it to hook seniors. With rising precious metal prices, investors fall victim to purchasing counterfeit coins, nuggets, or selling jewelry below market prices.
The National Unclaimed Property website is a public, easy-to-use source for claiming any funds that are rightly due. But scammers tell seniors to call a 809 number (which charges a high toll) and then to send their personal information and bank account numbers with which to commit identity theft.
False investment notes are created to give seniors a false sense of security in a private, informal loan agreement with the promise of high returns. Even legitimate notes can carry high risks, which is why borrowers and notes must be registered with the State. Pitched as personal loans or short-term business arrangements, this scam is often a cover for Ponzi schemes. Investors can check with their state regulator to determine if a promissory note and borrower are properly registered.
Schumacher stresses the old adage that if it sounds too good to be true, it probably is! This is only a small sample of the many scams that exist online. Scams can happen to anyone so before you invest, investigate using the reputable websites below:
To learn more about recognizing a scam visit…
Federal Bureau of Investigation
North American Securities Administrators Association
Seniors Against Investment Fraud, SAIF
Have you or someone you know been a victim of a scam not listed above? Tell us your story below.