McLEAN, Va. (11/25/09)--“Going green” generally has a positive association, but that wasn’t the case for some unsuspecting seniors looking for eco-friendly investments. The Securities and Exchange Commission recently charged four people and two companies with running a $30 million Ponzi scheme targeting elderly investors and people close to retirement who thought they’d found a green opportunity (USA Today
Nov. 16). Victims were encouraged through seminars, the Internet, and phone calls to liquidate their retirement plans and home equity, and buy securities promising returns from 17% to more than 100% a year. Rising health-care costs, low investment returns, and increased life expectancy make seniors prime targets of investment fraud, but consumers of any age can fall victim to these tactics. The National Consumers League, Washington D.C., advises:
* Don’t succumb to high-pressure sales--A good investment opportunity today likely will be here tomorrow. Pressure to act on impulse often is a danger sign of fraud. * Beware promises of quick, large profits--No one can accurately predict how an investment will perform. Investments that promise the highest payoff often are the most risky. * Realize there is always risk--All investments carry risk. Know your risk tolerance before investing. * Get details in writing--Representatives from a legitimate company will be happy to provide all the information you need. * Be wary of testimonials from strangers--Someone you don’t know offering investment advice could be a crook trying to lure you into a scam. * Investigate investment offers--Get help from your state securities regulator, the federal Securities and Exchange Commission (sec.gov), and the North American Securities Administrators Association (nasaa.org). * Use caution when receiving investment opportunity e-mails--Many unsolicited e-mails are fraudulent.
To learn more about senior scams, listen to "Investment Scams Targeting Baby Boomers’ Retirement Savings" in the Home & Family Finance Resource Center.