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Indiana Securities Division

Securities Division > Indiana MoneyWise > News You Can Use > Money Clip Tips - Keeping Your Financial Freedom in Your Golden Years Money Clip Tips - Keeping Your Financial Freedom in Your Golden Years

Originally published June 2012

According to a survey conducted by the North American Securities Administration, up to 44 % of all investor complaints coming into state securities regulators come from seniors.  Why is this?  Seniors are a prime target for financial investment fraud schemes for a variety of reasons: often seniors are living on a fixed income-this gives fraudsters a chance to offer ‘guaranteed’ money which can be appealing if seniors are worried about the money they have to live on or fear medical bills and other costs that may not have been considered when younger; also, seniors have been saving money longer than the rest of us, to a swindler this means they have more money for the taking.  The best way for seniors to keep their financial freedom and not fall victim to investment fraud is to be educated.  Know the schemes that could target seniors and know how to protect against them.

One of the biggest schemes targeting seniors is the “free lunch/dinner seminar”.  They are promised a gourmet meal with ‘free’ investment advice.  During the seminar, they might not be pressured to buy, however, a day or so later, a high-pressure sales pitch call will come their way because in reality there is no such thing as a “free meal”.  Another way fraudsters are gaining trust is through using special credentials such as “Senior Specialist” to create the illusion that they are experienced in senior investments.   More than half of individuals that are caught violating investment laws are using deceptive credentials.  One more thing to think about is whether the investment is right for the investor’s goals at that moment in time.  Seniors might be working with a licensed professional who is selling a registered security, but it might not be the right investment for their financial goals.  Sometimes seniors are sold securities without any consideration to how it might affect their financial well-being, just so that the salesperson can get a bigger commission up front.   

            Before investing there are a few things that should be done.  First, ask questions.  The broker should be comfortable answering any and all questions about the investment, if they brush off a question, they might be up to no good.  Meet with the broker in person and do not judge a book by its cover.  Fraudsters and swindlers may bring up images of sleazy, fast-talkers, but in today’s world they might look like a mom, a neighbor or even a minister.  Get everything in writing and understand all the details of the investment.  Do not give personal information out over the phone, especially if they initiated the call.  Hang up on unsolicited callers; there is no need to be courteous.  Most importantly, check the credentials of the broker and the registration of the security being sold with the Securities Division of the Indiana Secretary of State.

As a senior you have been saving most of your life to live stress-free in retirement; don’t let a fraudster trick you out of your hard earned money.  Outsmart the swindlers who think they can defraud you by investigating before you invest.  For more information on investment fraud or to ensure that your broker is licensed or a product is registered visit, or call 1.800.223.8791.