Fraud And How You Can Get Trapped

By Jon L. Ten Haagen, CFP ®
asktheexpert@longislandergroup.com

You thought you were immune, but remember Target and now Equifax -- everyone is susceptible.

Let’s take a quick one question quiz.

Who is most likely to be a victim if an investment scam?

A – A man in his 70s, ex-military, who actively researches and trades investments.

B – A widowed woman in her 70s who knows little about finances because her husband handled the investments?

Answer: If you answered A, pat yourself on the back. This past year, AARP surveyed more than 200 victims of investment fraud and compared them with a general group of investors. The results threw stereotypes out the window.

In fact, the ‘typical’ fraud victim was more likely to be male over age 70, a veteran and someone who makes an average of five or more investment decisions a year. These victims were more likely to be open to new sales pitches, take risks and make an investment over the phone in response to someone they had never met before.

But perhaps the most striking characteristic: Victims were significantly more likely to agree with the statement, “The most profitable financial returns are often found in investments that are not regulated by the government.

What can be learned from this?

Be skeptical whenever a stranger pitches an opportunity.

Never say yes to a new investment without doing lots of research and getting a sound second opinion.

Unregulated investments are very risky. Why take the chance?

Remember the Tortoise and the Hare; Slow and steady wins the race! This is from AARP – The Magazine.

Americans over age 50 are the prime targets for crooks who want to steal their hard earned accumulated funds. There are a number of reasons according to the FBI – Older Americans usually have more money to go after. They grew up in a more trusting time, they have health needs that can be exploited, plus when they are scammed, many are embarrassed and do not report it.

Scammers got away with tens of billions of dollars last year. Medicare fraud alone got an estimated $60 billion last year.

Many of these schemers show what look like good credentials as social workers, doctors, lawyers and financial advisers. They are masters of manipulation and pray on people’s emotions.

There are many scams and you should be aware of them and be on the lookout for them. The disability scams; A company called A Better Choice which gained trust saying they would provide in-home services to help older people with chores and their finances; They promise help in attaining peoples dreams by putting up a good looking false front and then stealing their assets: Even the poor get attacked by these criminals by going after their tax refunds and their public money by setting up false non-profits and the government funnels their money to these false fronts: They will also create a false funeral scam and take the monies ear marked for burial; The love connection in which a younger woman will show interest in an older man and gain his trust and eventually bilk him out of his hard earned funds. This is true of men coming on the older women.

So, think before clicking on a link you do not recognize, think twice about solicitations offering the promise of an iPhone or some other very nice sounding item. Do not give too much information on your social media site – This can come back to bite you! If you get a call about your grandchild in a hospital or in jail on the far side of the country, ask for a number to get back to and then hang up and contact the grandchild’s parents – about 99.9 percent of the time it is a scam. These scammers are getting more creative every day so you have to stay on your toes. If you have any questions about this article please reach out and call us for more detail.

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Huntington’s Jon L. Ten Haagen, CFP, runs Ten Haagen Financial Services, Inc., a full-service independent financial planning firm, and he is here to answer your questions. In this bi-monthly column, Ten Haagen will answer your financial questions and help you with his expert financial advice. Don’t be shy, our expert is here for you, so feel free to ask away! Email your questions to asktheexpert@longislandergroup.com today, and let our expert help you.

*Ten Haagen is an Investment Advisor Representative offering securities and advisory services offered through Royal Alliance Associates, Inc., member of FINRA/SIPC, and a registered investment advisor. He is also an active community member, serving on several nonprofit boards and as executive officer of the Greater Huntington Boating Council.

**BACK IN HUNTINGTON: The offices of Ten Haagen Financial Services, Inc. have moved back to 191 New York Ave., Huntington. Friends and clients are welcome to stop by, check out the new office and share a cup of coffee with the expert!­­­