As a senior or someone getting close to retirement, estate planning is often a top priority. Planning to pass your wealth to your grandchildren or children can be a rewarding experience, but often, in an attempt to build wealth, many fall victim to investment scams.
Common Investment Scams
There are many types of investment scams, and some can be hard to recognize. Here are the most common types of scams and how to spot them:
- Unregistered Investments – Any security should be registered correctly. Ask for proof.
- Pyramid and Ponzi Schemes – These schemes promise returns that are too good to be true and usually involve investing large amounts of money and being paid by the investments of others.
- Promissory Notes – A high-interest rate is promised but never materializes. Often, the fraud is not evident until it’s too late.
- Investing in Loans – Many of these opportunities are fake. Do your research.
- Investing in Currency or Metals – A promise of high returns lures victims, but the opportunity is not real.
- Life Settlements – While it may seem reasonable, this area has a growing number of fake programs. Be cautious.
- Pump-and-Dump – This fraudulent practice promises high returns on a low-priced stock using false information about the company. Verify any company data you are shown.
- Advance Fees – Often used to prey on those who have made bad investments. The criminal will ask for an upfront fee to invest, only to take the fee and disappear.
- Internet or Social Media Fraud – You may find an article, newsletter, junk mail, or sponsored post that promises you a significant return. Differentiating these from legitimate offers can be difficult, so ask a lot of questions.
Recognizing a Scam
With all of these scams, there are frequent themes. Thieves usually prey on those who are in need of money, either for retirement, to pay off debt, or because of bad investments. There is often a pitch that leans on an area of need for the victim (sickness, hobbies, politics, or employment). The perpetrators will do their research and know how to target their victims. In most fraud scenarios, the thief will strong-arm the victim, using tactics that leave a person confused, but caught up in the promise of a high return.
The key to avoiding scams is to know when something is too good to be true. Here are some common red flags:
- The promise of a high return in little time or with little effort
- A no-risk guarantee
- Overly consistent returns (most investments have ups and downs)
- Confusing explanations of the investment
- Missing documents
- Discrepancies in the information you are given
- Overly aggressive or pushy sales tactics
Have you been the victim of an investment scam?
Many people fall victim to these scams out of a desire to build wealth that can be handed down to their children only to find their efforts fruitless. If you feel like you have been a victim of an investment scam, it’s not your fault. These are well-practiced criminals who have experience in taking advantage of people trying to do the right thing for their families. But, you can try to recoup your losses and save for your family’s future. We can help.
Contact us today to speak with one of our experienced fiduciary litigation attorneys. We will evaluate your situation and offer advice on the strength of your case and the next steps you should take. Let us help you protect your family’s future.
