Are you too…fraud friendly?
Unfortunately, too many Americans are susceptible to financial fraud.
Financial fraud solicitations are everywhere. It’s hard to tell how widespread the problem is because people tend to under-report. Who wants to get ripped off, then admit to the world what an idiot they’ve been? It’s a double whammy most folks are unwilling to stomach.
The FINRA Foundation released a report that illustrates the problem. The report offers a name for one’s likelihood of falling for a scam. They call it “fraud susceptibility.” And to no one’s surprise, the report found that older Americans are especially vulnerable.
Too many people wouldn’t know a scam if it bit them on the nose. The FINRA report cited a few examples, such as… “Nigerian email fraud, lottery scams, penny stock sales, boiler room calls, pyramid schemes and free lunch seminars that turn out to be sales pitches.”
According to the report, “Many Americans lack an understanding of reasonable returns on investments, leaving them vulnerable to fraudulent investment pitches promising unrealistic returns or guarantees of returns.”
A client once told that her mother had a “friend” whose minister was trying to get her to invest in some land deal connected with his church. He apparently promised to make her lots of money and whenever she asked a question about it, he would tell her to trust God and believe that she will “reap the blessings of the Lord for the seed she has sown.”
She didn’t exactly think this guy was on the up and up, but she wasn’t quite sure what to do.
I suggested it was time for someone to turn the lights on for her mother.
Based on her comments, I concluded that her mother was a novice when it came to investing in land deals (and perhaps any other kind of investment).
If the minister in question had been legit, he should not have had any problem either providing details or pointing the mother to the person who can provide the details of why the proposed investment is such a good deal.
I suggested that her mother should be able to take projected financial statements (also known as pro forma financials) to her CPA, banker or financial professional for review.
Someone that has seen or (better yet) done land deals needed to review and approve this for Mom, too.
Once you begin asking for specifics and involving others who can offer experienced, professional scrutiny, you may find the shady-types trying to take advantage of the elderly will back off.
Whether it’s you or someone you love being offered a pitch that sounds just too good to be true, shine a bright light on the details and ask someone with knowledge and experience (AND your best interest at heart) to give you a second opinion.
Light has a way of making cockroaches run away.