Scam Artists and Seniors: How to Protect Yourself and Those You Love From Investment Fraud

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She found numerous emails from the woman asking for money, including receipts from wire transfers. Unfortunately, this is not uncommon.

Learn about the most common financial frauds and scams targeting seniors.

To help the elderly avoid becoming victims of fraud scams, it is important to understand why they are targets, what schemes and tactics are commonly used against them and how these schemes affect them. Unfortunately, elderly individuals are the most frequent targets of fraud scams. Fraudsters target the elderly, as they may be lonely, willing to listen and are more trusting than younger individuals. Many fraud schemes against the elderly are performed over the telephone, door-to-door or through advertisements.

Victim responds to a job posting and is hired for the fictitious job and sent a fake check for job related expenses. The check bounces and the victim is responsible for the full amount.

Associated with: Mystery Shopping , Fake Check. Video: Work at home. Article: 3 employment scams and tips to help avoid becoming a victim.

Learn about the most common financial frauds and scams targeting seniors.

Threats to life, arrest or other demands by scammers to unlawfully obtain money, property or services from a victim through coercion that they supposedly owe and threatens if they do not cooperate. Victims are often sent a check as a part of a scam and told to deposit the check and use the funds for employment expenses, internet purchases, mystery shopping, etc. The check is fake counterfeit , and the victim is left responsible for any funds used from the check.

Remember, funds from a check deposited into an account should not be used until the check officially clears which can take weeks.

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Article: How to avoid fake check scams. This scam is a variation on the Emergency scam. The victim is contacted by an individual pretending to be a grandchild in distress, or a person of authority such as a medical professional, law enforcement officer, or attorney. The fraudster describes an urgent situation or emergency bail, medical expenses, emergency travel funds involving the grandchild that requires a money transfer to be sent immediately. No emergency has occurred, and the victim who sent money to help their grandchild has lost their money.

Video: Grandparent. Article: 6 tips and insights to avoid the grandparent scam. Identity thieves use personal information e.

Investment Fraud

This may include opening a credit account, draining an existing account, filing tax returns or obtaining medical coverage. The victim sends money for the purchase of item ordered online e. Items are often advertised on Craigslist, eBay, Alibaba, etc. After the money is sent, the victim never receives the merchandise. Video: Online Purchase. Article: Fraud alert: Internet puppy purchase scams rising , Tips to protect yourself from online shopping scams this holiday season Victim is told that they have won a lottery, prize or sweepstakes and that money must be sent to cover the taxes or fees on the winnings.

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The victim may receive a check for part of the winnings and once the check is deposited and money is sent, the check bounces. Article: 7 tips to avoid lottery scams. The pitch suggests investors can take advantage of quirks in the monetary system to leverage additional cash and turn a few hundred dollars into thousands. Once con artists have access to the cash, they often block the victim from contacting them via social media or phone number. Article: Money Flip or Flop?

Use common sense and get a professional, third-party opinion when presented with investment opportunities that seem to offer unusually high returns in comparison to other investment options.

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Pie-in-the-sky promises often signal investment fraud. Does the investment meet your personal investment goals? Whether you are investing for long-term growth, investment income or other reasons, an investment should match your own investment goals. Back to Top. Ponzi schemes operate under the notion of "robbing Peter to pay Paul. While high returns are promised to investors, the only people who consistently make money are the promoters who set the schemes in motion.

Senior Scams: Avoid Being a Victim

A Ponzi scheme uses new investors' monies to repay previous investors. Sometimes referred to as a type of pyramid scheme, the promoter relies on the next layer of victims to invest their monies to support the previous layers of investors who are expecting certain promised returns on their investments. When the con works, it appears that the "investment" is legitimate and performing as represented by the promoter. But inevitably, the pool of new victims cannot support the previous investors, the pyramid crashes, and many victims lose their assets.

Other times, the operator flees with all the proceeds. Many consumers invest their money in securities.

Strategies to Protect Against Elder Fraud & Scams to Be Aware Of

Securities—investments with a potential for loss, but with the expectation of return—can include different investments with varying degrees of risk. Securities may include, but are not limited to:. When unregistered securities are sold, con artists often promise high returns on opportunities that they can't guarantee. These frauds prey on victims by using high-pressure tactics, not giving the victims enough time to check out the investment first. These unlicensed brokers bypass state registration requirements to pitch viatical settlements, pay telephone contracts, ATM leasing contracts, and other "limited or no-risk" investments.

Con artists also prey on consumers who may not know that they can call securities regulators for assistance. Remember, all investment opportunities must either be registered or qualify for an exemption from registration. Investigators can help consumers make sure the opportunity and the person selling it are properly registered. Registration of both the security and the broker are safeguards to help protect the public from fraud and lessen the chances of fraudulent activity.

Even if investments are registered, however, it does not mean that they can't be used to defraud investors. Remember, if it sounds too good to be true, it probably is.

Viatical investments involve betting on someone's life — literally. Consumers who invest in a viatical have chosen to purchase an interest in the life insurance policy of a terminally ill person viator. A viator may need the money for medical expenses or simply would like to spend the money during what may be the last few months or years of his or her life.

In a viatical investment, the investor buys the life insurance policy benefits for less than face value, and then when the viator dies, the investor receives the policy amount. In this situation, it appears that everyone wins — but this is not always the case. There is no guarantee when a person's death will occur, and, with the constant updates in modern medicine, a terminally ill person could live twice as long as originally anticipated.

Elder Abuse: Financial Scams Against Seniors

The longer the viator lives, the less the policy is worth to the investor. The investor may even be required to start paying the premium or lose their entire investment. While the opportunity seems like an extremely sound investment, choosing to invest in viaticals can be a very risky decision, even when done legitimately. It is extremely important to thoroughly research a viatical investment. The following are red flag phrases to look out for with viatical investments:. I n reality, a guarantee is nothing more than an illusion created by the promoter of a fraudulent investment pitch.

Since the rate of return on a viatical is completely dependent upon the amount of time between the date of the viatical investment and the date of the viator's death, fantastic rates of return are usually not an accurate promise. When con artists promote fraudulent viaticals, they often use false medical information that may not match what the insurance company has on record. Con artists may lie about the life expectancy of the viator, encourage the viator to falsely indicate a positive condition of health known as cleansheeting , or sell the policy immediately after it has been written known as a wet-ink policy , before the investor or companies involved know what has happened.

In some fraudulent investments, the investors may not even be notified of the viator's death and may continue to be billed for premiums. Even when a viatical is not fraudulent, it is still considered a risky investment.