Whenever there’s a crowd chasing a solution, there’s a fraudster willing to take their money.
While inflation has found people at the gas pump and the grocery line, the increased income inflation is supposed to provide has not found its way into Social Security payouts. This has resulted in many seniors searching desperately for high yield; and, the more desperate they are, the more the fraudsters like it.
The August issue of Retirement Advisor magazine cited a new investor alert from The Financial Industry Regulatory Authority (FINRA) that lists some “red flags” worth noting:
Watch out for CD offers that may be fraudulent. Some examples:
- Interest rates are significantly higher than average. Remember, CDs are from banks and all banks operate in the same economy everyone else does. In addition, they have to meet stringent reserve requirements and are subject to audit. There’s no free lunch.
- Emails coming to you with an originating address not from the institution cited in the promotion.
- Emails that contain misspellings or grammatical errors;
- Promotions from a U.S. financial institution claiming to be affiliated with an international bank;
- Promotions that are good “for a limited time only”; and
- Promotions that claim to be directed at “best customers” and that require extremely high minimum investments.
In addition, watch out for the phone scammers, as well. While many may be selling “too good to be true” investments – a huge red flag all by itself – there are others that aren’t selling anything.
My wife, for example, has family in Mexico. She recently received a call from someone claiming to be her nephew. He was being held by a Mexican gang demanding ransom! While he was on the phone with my wife, his cohort was on the phone with my wife’s mother (in her 90s) obtaining all kinds of personal information that could be used to verify his identity to my wife! It almost worked until my wife began asking questions that stumped him – he was calling from Mexico, so there was little our local police could do.
It’s good to be wary.