Financial Scams on the Elderly
Of course, we believe it won’t ever happen to us. We are not going to be a financial victim. Did you know that over 7.3 million Americans over 65 have been financial fraud victims? Financial scams on the elderly is a serious problem and will escalate as baby boomers reach retirement age.
The incident with Bernie Madoff taught us that anyone could be a victim. Many people have learned the thief may look like you and live in your community. One of the most recent challenges is scammers are often older people their victims can relate. They may offer their investments at churches or civic events.
Have you fallen for the reciprocity rule? According to psychologist Stephen Greenspan, who wrote the book Annals of Gullibility, many victims are embarrassed or feel obligated to respond after receiving a free meal in exchange for a financial pitch. Dr. Greenspan explains that people feel obliged to reciprocate when someone does them a favor. Ironically, people feel they need to respond with a bigger favor than the one bestowed on them.
When someone appears to share your background, age, or social circle, don’t automatically assume they are safe.
Be aware of too good to be true. We are looking for good investments, especially in this time of turmoil. If someone offers you a very high return with minimum risk, be aware it may be a Ponzi scheme. If it sounds like it’s too good to be true, it usually is.
Follow-up with research. Don’t hesitate to contact your state’s securities agency to verify the individual and company are in good standing. Verify the individual and firm are registered and don’t have any problems in their history.
Take time. Never fall prey to the pressure to buy in the moment. Always give yourself at least 24 hours to think about the investment, discuss it with others and research. If someone says you need to buy ‘now,’ that’s a huge red flag.
There is no way we can be 100 percent safe. Scams on the elderly will continue to increase. Make sure you protect your elderly parents, but also be aware that as we age, we’re going to be more susceptible to these unscrupulous individuals.