Financial Fraud and Seniors
Sometimes our advantages can become our weaknesses. If you're retired or getting close to retirement, you may have some great things going for you - like great credit, owning your home debt-free, and a substantial retirement nest egg.
We know how much you want to trust those you do business with. At the same time, you want to make sure you're treated fairly by those you work with.
However, along with your age, these great things can also put you at greater risk for a range of frauds targeting older folks. We will look at a few of the most common scams perpetrated on seniors and what can be done to avoid being taken advantage of.
The odds are that your residence is going to need repair at some time during your retirement, especially if you've been living in it for the past 25 years. Contractor scams happen when the contractor starts doing unnecessary repairs and then often overcharge for the work.
Other common variants include:
- Taking payments in advance and then never completing any of the agreed-upon work
- Using admittance into your residence as a means to burglarize it
- Convincing owners to be part of fraudulent insurance claims
Reputable contractors don't generally go knocking on doors to drum up business. If your house needs some work done, it's usually better to ask around for referrals or check out the contractors listed by your Better Business Bureau. Check out the contractor for complaints before consenting to have any work done.
Reverse Mortgage Fraud
Reverse mortgages can be a legitimate technique to draw out equity from your home. These are most commonly referred to as home equity conversion mortgages (HECM). HECMs are insured by the Federal Housing Authority (FHA). They were created so that people 62 years and older could easily pull the equity from their principal residence and not be burdened with monthly payments.
A problem can occur with non-HECM reverse mortgage scams; typically, a senior is used as an unsuspecting pawn in a property-flipping scheme or billed huge fees by an unscrupulous "advisor" that simply handles standard paperwork in a typical HECM loan.
If you're interested in a reverse mortgage, your bank or a reputable mortgage broker is an excellent place to start.
While people of all ages are taken in by various investment frauds, seniors seem to be targeted the most.
Always be skeptical and double-check with a trusted professional when it comes to your life savings. Don't succumb to any time pressure tactics; if it's something that you have to decide right now, your answer right now should be "NO." False time limits are a common technique to get people to commit their hard-earned money to a fraud.
It probably doesn't seem fair that anyone has to be on alert in retirement; it looks like you've earned the right to just relax and enjoy life. However, unfortunately, be on guard, you must. In most instances, verifying information with third parties or merely demanding more details in writing will discourage most scam artists.
If you are taken advantage of or spot a scam being offered to you, report it. Hopefully, the perpetrator will be stopped before he can harm anyone else.
Always remember that scam artists are usually looking for the most comfortable victim. They can be very persistent when they believe there is money to be made, but they're also very quick to go away when things don't look promising.
You might be able to retire from your profession, but you can't withdraw from being careful. Keep an eye on that nest egg, and don't turn it over to anyone that you haven't checked and double-checked. Such vigilance will help you keep the savings you worked so hard for away from thieves - safe and sound.
If someone contacts you about a "sure-fire investment," pick up the phone and make sure you give us a call. In fact, if any of these things happen to you, or someone tries to get you to do any of these things, call us to check it out first.
You want to make sure your retirement is a happy one. Don't be one of those people who have their life savings drained away by a fraudster. Instead, focus on getting enough and not the most. That is the best way to stay away from frauds.
If you want to talk about any of the topics in this post or any other issue where you might have questions, click on the button below to set a time to speak with us.