For Mark Roberts’ Use: Financial scams sound like something that only happen to television characters, or the young and inexperienced. Most of us believe we couldn’t possibly become a victim of a con artist, because we’re generally well educated on financial issues. And besides, these things are super rare, right?

Unfortunately, no, financial scams are not nearly as rare as you might think. In fact, a study by the FINRA Investor Education Foundation found that 84 percent of Americans age 40 and older have been solicited to take part in a fraudulent financial scam at some point during their lives. And sadly, 11 percent of survey respondents said that they had lost money to such a financial scheme. Not only are these scams more common than you believe; a significant number of people have fallen for them.

So how, and why, does this happen? The FINRA study found that the following sales pitches aren’t as obviously fraudulent as you might expect:

  • “This investment has made hundreds of people extremely wealthy” – 30 percent of survey respondents thought this statement was reasonable
  • “The lowest return you could possibly get on this investment is 50 percent annually, but most investors are making upwards of 110 percent per year” – 42 percent of people responded favorably to this statement
  • “There is no way to lose on this investment; it’s fully guaranteed” – 43 percent thought this statement sounded legitimate!

All of these sales pitches have one thing in common: They set forth unreasonable expectations regarding your potential return. Hearing such promises should be a red flag, but retirees who are worried about their future incomes tend to fall for them. It might even be a case of believing what they hope is true, because they’re desperate to boost their retirement savings at this time in their lives.

So, how can you keep a level head when approached about an investment opportunity? Just remember these rules:

  • If it sounds too good to be true, then it probably isn’t true.
  • Never provide your bank account information or send money without proof of someone’s legitimacy.
  • Remember that schemes won’t be obvious; con artists work hard to make everything look legitimate.
  • Exercise skepticism in every situation.

And if you’re feeling concerned about your retirement savings or income, there are more productive ways to address that anxiety. Remember to meet with us regularly to discuss your concerns, and we can help you identify legitimate opportunities to address your budget concerns.