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Horizon Elder Law & Estate Planning Blog

Saturday, October 29, 2016

Top 5 Financial Scams Targeting Californians

 Financial scams can wreak havoc on the financial well-being of the victim – oftentimes creating a lifelong ripple effect, taking years to unravel. The following are some of the most common financial scams targeting Californians – particularly those in the elderly, senior citizen and “Baby Boomer” demographics:

            #5: Free Lunches: As the old saying goes, “there is no such thing as a free lunch.” No truer is this adage than in the financial scam arena, and all-too-often these scams start off with a seemingly innocent invite to a local lunch spot for a sandwich and seminar. After scammers entice their victims with a meal at one of the area’s nicest dining locations, victims are offered several products and options – which they almost always do not need – at rates well above market norms. These one-size-fits-all meetings are not tailored to attendees’ individual needs, and they are often scammed into purchasing unnecessary financial products.

            #4: Annuities: For some, an annuity is a smart and savvy investment tool used to supplement retirement income. For many others, however, annuities are sold at extremely high surrender charge, often making the “investment” not an investment at all. In California, annuities targeted for senior citizens must contain an unambiguous disclosure describing the surrender charge period, and anyone considering this type of product should speak with a trusted financial professional before signing a contract.

            #3: Pyramid Schemes: Pyramid schemes are often Ponzi schemes disguised as cutesy retail gigs or side jobs promising easy income with little extra work. In reality, pyramid schemes require a steady flow of new recruits to keep the house of cards from falling. Warning signs of a too-good-to-be-true pyramid scheme include unreasonably high buy-ins, rewards for bringing in new “recruits,” or lack of a customer refund policy.

            #2: Commodities Trading: Commodities (e.g., oil, livestock, produce) trading is a highly-technical niche of the investment banking market, and even seasoned investors assume a heightened risk when working in this market. Due to the unpredictability of commodities and futures trading, steer clear of any offers to dabble in this industry, particularly if the sales pitch involves unreasonably high rates of return and consistent predictability – two factors not necessarily associated with commodities trading.

            #1: Mortgage & Reverse Mortgage Fraud: Senior citizens are unfortunately frequent targets of mortgage and reverse mortgage fraud, often due to the fact older folks are more financially secure and tend to own their homes outright. While a reverse mortgage may make sense in some situations, it is often not a beneficial option – so be sure to speak with a trusted advisor prior to signing anything. Likewise, beware of advertisements for refinancing that seem too good to be true – they usually are.

Contact California’s Horizon Elder Law & Estate Planning Today!

To learn more about safe financial options, contact our office right away: 925-275-5509. 


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