Florida and federal regulators are teaming up with AARP to alert seniors to the dangers of investment fraud, especially during tough economic times.
“Unsteady stock markets, record low interest rates and rising health care costs are combining to create a perfect storm for investment fraud against senior investors,” warned Florida’s Chief Financial Officer Tom Gallagher. “A well-informed senior is much less vulnerable to fraud and abuse.”
State regulators say older investors are being targeted with increasingly complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settlements, and Ponzi schemes all promising inflated returns.
“Scam artists know that seniors and others living on fixed incomes are being squeezed in the current financial environment,” said Don Saxon, director of the Office of Financial Regulation. “Their products and pitches sound tempting to many seniors who’ve seen their retirement accounts dwindle in recent years and don’t have the benefit of time to recoup their losses.”
“Over the past few years, many people over 50 lost money in the stock market that represented a lifetime of savings. These people, who are desperate to recapture lost income, may make desperate decisions, making them easy targets for fraud,” said Lyn Bodiford, State Affairs Coordinator of Florida AARP.
In South Florida, two seniors invested in what were presented as high-yield mutual funds and “blue chip” stock, both bogus investments. One senior, who took out a $250,000 mortgage to invest, lost her home and is now living with her daughter. The other senior, who lost $150,000 in the scam, has had to heavily mortgage his home, which he at one time owned free and clear. Both seniors are struggling to make ends meet.
“Don’t put everything you have worked hard for your entire life at risk for a quick, get-rich scheme,” said Gallagher.
Saxon is urging seniors to report information quickly to state regulators if they have been victimized. “Every day that financial fraud goes unreported is another day that criminals can steal retirement savings from unsuspecting seniors,” he said.
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