Elder Financial Fraud, Annuities, and Stopping the Scam Artists

elder abuse

Senior financial fraud costs billions of dollars a year. It's considered the fastest-growing type of elderly abuse, and it's all about the money.

Elder financial fraud is costing senior citizens in the US over $36 billion dollars every year, and the numbers are expected to climb. When a person illegally or inappropriately uses a vulnerable elderly person's money or property, it's considered elder financial fraud. Not only does it gravely affect the victim directly, but it also has dire consequences for the entire family. It can literally tear families apart.

But while these circumstances have plagued seniors and their families, there are steps that can be taken to cut down on these incidences. One way is to take out annuities.

Spot These Common Financial Scams on the Elderly

Financial scams against the elderly come in a variety of forms. It's important to be able to identify if there's a scam in the works before your loved one has their money snuffed from right under their noses. Here are some common scams carried out on US seniors to keep an eye out for.

Unsolicited Home Repairs

Many elderly in the US live alone, and have a reduced capacity to make certain repairs or updates on their homes themselves. Scammers know this, and have been perpetrating home repair scams to swindle the elderly of their money by preying on their vulnerabilities. This type of scam can be done either over the phone or in person, and many times naive seniors cannot stand up to a pushy salesperson.

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The scammers might say something along the lines of, "Mrs. Jones, your new furnace is here. We're ready to install it, but first we need your credit card info for payment to complete the installation." The victims might think they simply forgot about the order, and will often pay for it just to avoid any embarrassment from their forgetfulness. Even those who genuinely require home repairs can be grossly overcharged for such services, or even be charged numerous times for the same work.

False Prizes

Many elders have been scammed out of their money by being tricked into believing they were winners of a false prize. The scammers might say something like, "You've just won the lottery!", after which the victims are coerced into wiring money for "taxes and fees" before they're allowed to collect on their supposed winnings. Such scams cost seniors about $1 billion annually.

Uncollected Debt

Scammers are very savvy in their work, and do a lot of homework and research before swooping down on their prey. With the uncollected debt scam, seniors are scoped out during a vulnerable time in their lives after their spouses have passed away. Scammers will actually comb through the obituary section of the newspaper to find widows and widowers. Then they call these individuals to tell them that their deceased spouses have left them with thousands of dollars in unpaid debt.

The elderly are then threatened with eviction, financial distress, and even public humiliation if they don't pay up. Vulnerable seniors will then send the scammer the money in order to avoid suffering the consequences they were threatened with.

There are a variety of other scams out there focused on the elderly. While becoming educated on the ones that are in operation is important, scammers are always coming up with new plans. For this reason, it makes sense to have liquid cash placed into a secure form, such as annuities.

How Can an Immediate Annuity Protect My Savings?

Immediate annuities were created to help individuals secure a reliable, steady cash flow during retirement and avoid outliving one's assets. Payments are made on a regular basis with the remainder protected from financial fraud.

Money placed into an immediate annuity is illiquid and cannot be withdrawn. Because of this illiquidity, an immediate annuity can keep your money secure from dishonest scammers. Without access to the cash, the money cannot be stolen.

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Buying an immediate annuity makes sense for those without an ample employer pension or enough social security income. It provides payments well into retirement. For those without substantial savings, immediate annuities can provide the much-needed cash long after a fixed income from employment has stopped.

Immediate annuities especially make sense for those in good health since the best payout comes from living a long time. Not only are these annuities are great financial products for people looking for stable, guaranteed retirement income, they're also effective at protecting your money from unscrupulous scammers.

News stories about annuity fraud:

Think Advisor - August 7, 2015 - SEC, FINRA Enforcement: 2 Busted for Selling Fake Charitable Gift Annuities

Consumer Affairs - Jul. 17, 2015 - California Case Illustrates Dangers of Annuity Frauds

KESQ Channel 3 - Jul. 15, 2015 - Palm Desert Man Sentenced Over Nine Years for Annuities

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