Retirement Seminar Fraud: Seniors Beware

There's no such thing as a free lunch. Unfortunately, many seniors are discovering how costly "free" lunches or dinners can be when they are disguised as retirement seminars.

Senior investment fraud is on the rise. The obvious reason is demographics: baby boomers are reaching the retirement age; our population is not only aging but seniors are living longer. But along with them are countless con artists with one scam or another - identity theft, telemarketing schemes, and one of the nastiest, investment seminars for seniors. These retirement seminars, run by so-called "senior specialists", are basically designed to steal a senior's retirement income.

Most seniors take a lifetime to save for their retirement, but too few of them take the time to protect their money, and these specialists are counting on them not researching before they invest.

These specialists - retirement seminar instructors - are preying on seniors by using the education excuse: they are counting on seniors wanting to learn about investing. The key to stopping retirement fraud is to educate seniors on these scams and how to look out for con artists.

Potential Investors Beware!
Some titles of seminar scams are the following:
• Asset Protection for Seniors
• Common Sense Retirement Strategies
• Six Mistakes Retirees Make with Their Finances
• Striking it Rich in Retirement
• Tax free IRA/401 K Withdrawals

These seminars are often run by people well versed in high-pressure sales and tactics. They lure you with a free lunch or lavish dinner and usually cover topics of particular interest to seniors and retirees such as asset protection, estate planning and taxes and real estate investments.

These seminars are advertised in all the usual channels: local radio, newspapers and magazines, by direct mailings or e-mails. Quite often a specific product will be the calling card, such as annuities (variable and equity indexed), followed by insurance, REITs (real estate investment trusts) and mutual funds.

Don't be fooled by slick presentations. Seminars often include glossy brochures, workbooks, PowerPoint slides and notes and handouts.

What You Can Do to Prevent Investment Fraud
Check the credentials of people who are purported "senior specialists". If they are unwilling to disclose their credentials, chances are you are their next victim.

Research has proven that prevention and education are major deterrents to investment fraud. To that end, [NASD] (the world's leading private-sector provider of financial regulatory services) recently joined with the staff of the Securities and Exchange Commission (SEC) and the Florida Office of Financial Regulation in a new initiative focused on sales seminars. Companies will be scrutinized to determine whether their sales seminars are legitimate.

For information about brokers or to lodge a complaint, investors can also contact their state securities department. Each state has a separate securities department that regulates the securities industry. Investors can also file a complaint directly with NASD.

Legal professionals are filing cases against companies offering retirement planning seminars that are used to sell annuities. These "free" lunches or dinners are turning out to be very costly. Unbeknownst to the consumer, annuities have high fees if they are cancelled any time in the first 5-10 years. Also, since annuities often earn less than a C.D., they are usually not a good investment for retirement planning.