Older adults are often the target of financial swindlers. According to the Investor Protection Institute, over half of adult protective services workers, doctors, law enforcement officials, securities regulators and others who regularly deal with older adults report often encountering elderly victims of financial exploitation. U.S. government figures show that financial fraud costs seniors close to $3 billion each year!
The Consumer Finance Protection Bureau recently reported that seniors are often invited to attend “free lunch seminars”—events that are marketed as educational get-togethers, when in fact, they are sales events to sell everything from insurance products and funeral services to financial investments, such as reverse mortgage products, real estate investments, mutual funds and securities. Some free lunch seminars are on the up and up—but many are hard-sell sales pitches in disguise.
Seniors can be especially vulnerable to this sales tactic. They often have a nest egg—money in retirement accounts, home equity and other accumulated assets. They may be dealing with memory loss and impaired judgment. Seniors were raised in a time when politeness was valued—they find it harder to say no. And the wording on the invitation may be designed to create a sense of urgency—“limited seating available,” “call now.”
According to the Financial Industry Regulatory Authority (FINRA), these seminars are often advertised with names like “Senior Financial Survival Seminar” or “Senior Finance Workshop.” Sounds good, right? Who doesn’t want to learn about financial well-being?
And a free lunch, what’s not to like? The seminars are often held in upscale restaurants, posh hotels or golf resorts. Sometimes they’re even held in the person’s own retirement community or church. There might be door prizes, gifts, or the chance to win a vacation trip and other prizes. The speaker might even be a celebrity or known author! With all this high-class spectacle, they must be on the up-and-up, right?
And the postcard invitation has a reassuring claim that “this is not a sales pitch.” Sounds good! However, says FINRA, even if attendees aren’t pressured to make a decision or purchase at the seminar, they often receive follow-up contacts from the company. Perhaps as the dessert is being served, the presenter passes out cards for the diner’s contact information. Sales calls follow, and the seller can be pretty persistent!
It’s important to be cautious. According to FINRA, half of the sales materials attendees received “contained claims that appeared to be exaggerated, misleading or otherwise unwarranted.” Even worse, 13 percent of the seminars appeared to involve outright fraud. Though not all free-lunch seminars are held by unscrupulous companies, it’s good to be cautious.
Read more from FINRA here. And if an older friend or loved one tells you they’re planning to attend a free lunch seminar, here’s a thought! Make them a lunch yourself, and while you’re chowing down, watch this short video from FINRA to open the conversation about how to avoid the free-lunch bait.
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