Sheryl Garrett, CFP
Sheryl Garrett, CFP, founder of Garrett Planning Network, a nationwide network of fee-only planners based in Eureka Springs, Arkansas. GarrettPlanningNetwork.com
Seniors are prime targets for scammers. Many have amassed impressive financial resources, while many others are struggling with the challenges of living on a fixed income. Scammers often jump in to exploit this situation. Biggest rip-offs targeting seniors…
Rip-off: Unscrupulous insurance agents misrepresent Medicare policies.
Medicare beneficiaries have a bewildering array of health insurance options now. They can choose from dozens of “Part D” prescription drug plans to supplement Medicare, and they can opt out of traditional Medicare and enroll in private Medicare Advantage Plans for their medical and drug coverage. This is fertile territory for scam artists…
Self-defense: Before buying any Medicare-related plan, card or policy, contact your state insurance department. Ask if the agent is licensed, if the product is legitimate and whether there have been any complaints against the agent or the company. If you have been fraudulently enrolled in a Medicare Advantage Plan, contact State Health Insurance Assistance Programs (SHIP) at www.shiptalk.org. (Click on “Find a Counselor.”) Also contact your state insurance department and attorney general’s office, which can take action against agents for sales abuses.
Rip-off: Investment deals that are really Ponzi schemes.
In a Ponzi scheme (named for a 1920s con artist), you are offered the opportunity to put money into a sophisticated investment — such as real estate, oil and gas leases, promissory notes for a start-up company or housing for the homeless — that will pay very high returns. You invest, and soon you’re getting statements and the promised returns. But after a while, the statements and the payments stop coming. You can’t get your money out because the scammer has disappeared.
There never really was an investment. You were paid with money that later participants “invested” in the scheme.
Beware: There are a variety of Ponzi schemes being used right now. Examples…
Self-defense: Be especially suspicious of an investment company that claims to be registered in one state, physically exists in a second state and sells to investors in a third state. It’s likely the company does not exist.
Always check with your state securities regulator to verify an investment company’s registration. You can find your state’s regulator through the North American Securities Administration Association (202-737-0900, www.nasaa.org/). At its Web site, click on the “Contact Your Regulator” link and the state where the business is supposed to be registered. Or go to the Financial Industry Regulatory Authority site (www.finra.org) to look up a securities firm or broker.
If you think you may be a victim of a Ponzi scheme, contact your state attorney general’s office.
Rip-off: International investment schemes that “offer” extremely high yields in a relatively short period of time.
The con artist purports to have access to “bank guarantees” that he can buy at a discount and sell at a premium, producing exceptional returns. To make the schemes more enticing, con artists often refer to the “guarantees” as being issued by the world’s “prime banks.”
Legal documents associated with such schemes often require victims to enter into nondisclosure agreements, offer returns on investments in “a year and a day” and claim to use forms required by the International Chamber of Commerce (ICC). In fact, the ICC has issued a warning to all potential investors that no such investments exist.
Self-defense: Reject any investment that offers unusually high yields by buying and selling anything issued by “prime banks.”
Rip-off: Claiming to be able to prevent foreclosures.
The scammer makes misleading promises that a victim’s home will be permanently saved from foreclosure by signing the title over to the scammer. The victim ultimately loses his home, along with the money he paid to the scammer, who walks away with the title and equity in the home.
Because foreclosure filings are public information, scammers target already troubled home owners, repeatedly contacting them by phone or mail. Self-defense…