Scam Artists Preying On Seniors

 

By Jon Flynn

 

Looking for a little advice, a retired married couple from the Poconos that I’ve known for some time gave me a call.  They were being regularly solicited by a “representative” of a company that “specialized in creating living trusts”.   The trusts were supposedly low cost and easy to implement.   The cost - ONLY $2,500.00!  After being told by the representative about all of the costs and time delays involved with the probate process the price seemed like a real bargain to my friends. The company also recommended an annuity product that paid an unbelievably high interest rate.  Again, another great deal.  According to the couple, the representative made everything sound like a no-brainer.  However, being former New Yorkers’, they prided themselves on being able to pick up on a potential scam.  Were they right?

 

You bet they were, in fact, Pennsylvania Attorney General, Tom Corbett, has been very active on confronting this scam, due to how wide spread it has become.  For example last year, he filed a lawsuit against the operators of a living trust sales scheme naming 11 defendants.  According to the complaint, the defendants prey on elderly individuals by way of telemarketing, seminars, and mass mailings.  Their goal allegedly is to induce senior citizens to purchase expensive estate planning documents even though there may not be a need.   In addition, it’s also alleged that these companies encourage consumers to convert their savings to various types of annuity contracts, even if the move has a negative impact from a financial or tax standpoint.

 

The following tips can help reduce your chances of being taken by these scam artists:

 

-          Don’t go it alone. Always consult with a trusted attorney or estate planner.  Avoid telephone solicitors or door-to-door sales people.

 

-          There’s no rush. High-pressure sales tactics are always a sign something is probably wrong. If a planning strategy makes sense for your financial situation you don’t have to hurry to sign on the dotted line.  Legitimate strategies don’t need to be acted on quickly or they will go away.

 

-          Be sure the professionals you choose to work with are familiar with many different types of strategies.  A good lawyer has many arrows in their quiver and will use only the most appropriate strategies for your unique situation.  When dealing with a company for example that just provides living trusts and only living trusts, keep in mind the old saying,  “To a hammer, everything looks like a nail”.

 

If you felt that you have been contacted by one of these scam artists, please call the Attorney General’s Bureau of Consumer Protection hotline at 800-209-8085.

 

 

Jon Flynn is a Certified Financial Planner ^TM and owner of Flynn Financial in Eynon. He is a Representative of Securities America, Inc., Member FINRA/SIPC and of Securities America Advisors, Inc. Flynn Financial and Securities America are unaffiliated.   Mr. Flynn can be reached at 570-876-5015.