Criminal activity towards senior citizens’ finances has increased from people wanting to take funds from their life insurance and annuities. However, regulators and financial advisors are providing information to protect this vulnerable part of the United States population. The Financial Industry Regulatory Authority (FINRA) wants to help seniors keep their money safe from criminals. Geri Walsh, Senior VP of Investor Education gave these tips:
1. Ask many questions. The more information you have on the investment, the better. Here are questions you could ask for clarity: Are the investments registered with the SEC (Securities and Exchange Commission), or a state regulator? Why or why not? What fees are associated with the investment? Is the investment liquid? How liquid is it? What are the associated risks? What’s the chance that the investor could lose money? Do you have the correct documentation needed to retrieve cash out of your accounts? Do you fully understand what you are buying? If they push you to make a snap decision, or you don’t completely understand what you are getting into, those are red flags. Do not proceed or give them any access to your money.
2. Do you know if the salesperson is registered in your state to sell financial products? You can check their background at FINRA BrokerCheck. This information can be verified with your state’s securities and insurance regulators. Ask about every cost, such as commissions paid upfront and the withdrawal charges to start or cancel the contract. Thoroughly understand how the product works. Always ask for details in writing, so you can take your time to digest the information given. Complete your research and understand the pros and cons.
3. Make sure you have someone in place that you trust to check on your investments. Give the advisor (or broker) someone to contact if they spot unusual activity in your accounts. That may help the company figure out if someone is trying to swindle you.
4. Know the techniques criminals use. Fraudsters often try to play with your emotions by dangling the opportunity of risk-free wealth, a “free meal,” or using some type of offer to convince them to act with urgency.
5. FINRA has a toll-free securities hotline for senior citizens at 844-574-3577, which gives older investors a place to ask questions regarding their investment accounts and other financial products. AARP also has a Fraud Watch Network, which tells older Americans what to look for so they will not get scammed, and where to go for help if they do fall victim.
Please protect your older family and friends from financial disaster. If you think that fraud has occurred, please call adult protective services in your area or others who can help the person in need.
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