You Know What They Say About a Free Lunch
I'm not quite ready for membership in AARP, but increasingly I've been getting invitations in the mail for me and my husband to attend investment seminars that promise to help us ensure we have enough money to retire.
The notices use all the right buzzwords. But I have a special place for those invitations -- the trash.
You may be promised a free lunch or dinner, but the meal may cost you much more. The meetings follow the same form: Herd in people. Scare them to death with tales of how they won't have enough money when they retire. Or promise amazing returns or access to investment products available only to a select group.
The hairs on my arm stand up when I hear such promotions. They just sound too good to be true. The people involved are too slick, too hyper and too eager to show you a special way to wealth. Yet for every one of us who can sense a scam a mile away, there are others whose radars aren't tuned in as well. It's not that these people are stupid. They are just too trusting. In fact, one survey showed that investment-fraud victims demonstrated a better understanding of basic financial literacy than non-victims.
So how do you get people to trust less and verify more?
At an upcoming investor summit in Washington for seniors, regulators will try to help participants steer clear of investment schemes by dissecting how the scams operate.
"We will be focusing on educating people about the persuasive tactics promoters use," said John Gannon, senior vice president of investor education for the Financial Industry Regulatory Authority (FINRA).
Gannon said the swindlers are skilled at using all kinds of tactics designed to put people in a "psychological haze" that prevents them from spotting a scam or that a certain investment product isn't appropriate for them.
The Securities and Exchange Commission is hosting the seminar in conjunction with AARP, FINRA and the North American Securities Administrators Association. It will begin at 10 a.m. Monday at SEC headquarters in the District. If you can't attend, you can listen live via a webcast on the SEC's Web site: http:/
The summit also will include the release of a joint report from the regulators participating in the summit. They examined 110 firms offering "free lunch" investment seminars aimed at seniors.
Among the common tactics used to bamboozle seniors: