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April 2015

Older Americans Targets of Financial Fraud

America’s senior generation grew up in a different world. Earlier decades of the twentieth century were governed by courtesy, good manners, loving one’s neighbor as oneself, and trust in one’s fellow man. Today, these exemplary standards of conduct are getting seniors into trouble. Con artists, offering a wide variety of too-good-to-be-true investment “deals,” are banking on the willingness of older Americans to seal their shady scams with the proverbial handshake. Unfortunately, many seniors today are finding themselves in financial tight spots, making them more inclined to jump at the chance to “double” their money.  With today’s multitude of contact options, ranging from the phone to the Internet, scammers have virtually an unlimited number of “ins” when targeting victims. Common scams include e-mailed chain letters that are not only illegal, but also promise a pyramid of payoffs that always fall apart once the victim has bought into the system. Another common scam is one in which a Nigerian prince, doctor, or chief e-mails the victim and claims to need assistance transferring his riches to an American bank account. The victim is promised as much as 30% of the transferred millions and is asked to pay the perpetrator a fee to prove his or her honesty.

Fake charities are another common scam method. Kind-hearted donors are swindled into becoming victims by paying ridiculous sums to a cause that only benefits a con. Phone calls and paper mail are often used to offer individuals the chance to “win” the lottery or claim a sweepstakes prize. In the end, these supposed winnings only end up causing financial loss and heartache. Topping off all of these scams are fraudulent investment opportunities wherein the victim is promised fantastic returns on capital from “lucrative” oil and gas leases, penny stocks, rare coins and metals, etc. The list is endless.

Too often, these scams go unreported because of the shame victims experience once they realize they have been had. And that’s just what scammers are banking on. The FINRA Investor Education Foundation teamed up with WISE Senior Services and the AARP to study this growing crime in a report entitled, “Off the Hook Again: Understanding Why the Elderly Are Victimized by Economic Fraud Crimes.” Several discoveries were made, including the typical psychological tactics cons use. These tactics increase cons’success rates and decrease the chances of them being reported. Victims may be led to believe that their only option is the one being presented in the scam, or the scammer may befriend the victim knowing full well that people are less inclined to ask friends hard-hitting questions. Another ploy is a request for help from the scammer tapping into the victim’s pity. Or the scammer may claim famous investors, like Donald Trump, are also buying into the property, or the product is in such high demand and so rare that the victim is lucky to have even heard about it in the first place.

Con artists may also use their assumed authority roles to coerce victims into letting the con make the decision for them; offer no-risk, guaranteed results; intimidate the victim by playing on his or her fears; or procure more and more payments by telling victims they are committed to the investment and must continue to invest in order to not lose the sums they have already paid.

On paper, these tactics might sound entirely see-through. But in person, they are too often extremely effective. The FINRA study also revealed that fraud techniques are often tailored to the psychology of the individual. Financial education, alone, will not be enough to put an end to senior fraud, since one of the study’s major findings indicated that senior fraud victims are more financially educated than non-victims and more willing to listen to sales pitches. In addition, victims are more likely to have experienced negative life events, such as job loss, divorce, or the death of a spouse.

Anyone approached with a “must-act-now” deal should take the time to walk away and do some research. Be skeptical, question why the offer is being made to you at that time, and contact the Better Business Bureau to learn more. Don’t waste time listening to cold-call sales pitches, and make sure to get second opinions from friends and family before taking action on any hot deal. In the end, follow the golden rule of thumb. If it sounds too good to be true, it probably is.

Copyright © 2013 Liberty Publishing, Inc. All Rights Reserved.

Improving Your Credit Score

Your credit score is a number that lenders use to gauge how likely you are to repay debts on time. It is derived from information compiled in a credit report, including your payment history (whether you have missed or been late with any payments for bills or loans), the amount you owe creditors compared with the amount of credit that is available to you, and the extent of your credit history (how long various accounts have been open).

Know Your Number

Before launching a campaign to raise your credit score, know what you are shooting for. Get a current copy of your credit report and review it for accuracy. All U.S. consumers are entitled to free annual credit reports from the major credit reporting agencies, which are Experian, Equifax, and TransUnion. You can request all three reports at Unlike credit reports, your credit score is not free. You can purchase your score from one of the above-mentioned agencies or from A typical credit score will range between 300 and 850 points. Although all lenders make decisions based on the particulars of the lending situation, generally speaking, the higher your score, the lower the perceived risk to the lender, and the more attractive the interest rate you will be offered.

Room for Improvement

A few tips for raising or maintaining a higher credit score include:

Paying your accounts on time and keeping your balances low. Lenders are looking for a proven track record of making timely payments. Payment history determines about 35% of your credit score.
Being conservative in the amount of available credit you use at any given time. About 30% of your score is determined by what the industry refers to as your “utilization ratio,” which is the amount you owe in relation to the amount of credit available to you. If that percentage is more than 50%, your score will be lower.
Holding on to older, unused accounts. The longer an account has been open and managed successfully, the higher your score will be.
Maintaining a diversified credit mix. If you hold an auto loan, a home mortgage, and credit cards that are well managed, you will generally have a higher credit score than someone whose credit consists mainly of finance companies.

© 2011 McGraw-Hill Financial Communications. All rights reserved.

How to Help Keep Identity Thieves Away

The more business we do and information we share online, the more identity theft becomes a growing threat to our financial security. There are ways you can help protect your good name and credit. Here are some tips to help keep you and your family safe.

Monitor Your Accounts

This goes for everything you have financially — credit cards, banks, brokerages, credit unions — as well as email and social networking accounts. You should also monitor your phone bills (both cell and landline), as thieves can “piggyback” on your plans.

But above all, be sure to check your monthly financial statements carefully. If you notice something strange — even if it is just for a small amount — call the issuing financial institution immediately and report it.

Sometimes identity thieves test, or “phish,” stolen account numbers by running a small charge or debit — often of a dollar or less — to make sure the account number is legitimate. Most accountholders don’t notice the transaction or don’t think it’s worthwhile to alert their financial institution. That is, until a few weeks or months later when thieves wrack up big credit card purchases or drain a bank account. Bottom line: If you see something “fishy,” no matter how small, report it right away.

Vigilance is the word for your email and social media accounts. The more information you share with the world — say, by posting your birth date to your Facebook profile — the easier you are making it for thieves to find that information. Check your privacy controls, and keep checking. Facebook for one is notorious for changing its policies with little or no notice. Also check the information your children are sharing online. They are less likely to be aware of privacy concerns and the consequences of sharing sensitive information.

Finally, you should Google yourself periodically to see what type of information about you or your family is publicly available. You may be in for a surprise.

Shred Sensitive Documents

You don’t have to shred every piece of mail you receive, but anything with account numbers or other personal data should be shredded. You should also be sure to shred certain pieces of junk mail — especially those unsolicited pre-approved credit card offers that seem to show up in your mailbox on a weekly basis.

You can further reduce or even eliminate these nuisance offers by opting out of the lists aggregated by credit bureaus, who then sell your name to lenders. Go to or call 888-567-8688 to get your name off these lists.

Check Your Credit Reports

The Fair Credit Reporting Act gives all American consumers the right to access their credit reports from the big three credit bureaus (Equifax, Experian, and TransUnion) for free once a year. Many unscrupulous firms will offer access to these reports for a fee or on a subscription basis. You shouldn’t pay anything for this access. To get the reports, go directly to the source:

You can also place a security freeze that will prevent anyone from viewing your credit report who is not affiliated with a company that you already have a financial relationship with or certain government and exempt agencies. You have to visit each credit bureau individually to do so.

Note: Security freezes are not free. Each agency charges a fee for this service, unless you are already the victim of an identity theft.

© 2011 McGraw-Hill Financial Communications. All rights reserved.

How Can You Manage Your Debt?

Understanding how much debt you can handle and being smart about managing it can help you pursue long-term financial goals. Consider the following tips when analyzing how much you owe:

1. Calculate how much debt you carry. Although there are exceptions for special situations, many mortgage providers consider the most attractive candidates to be those with a total debt-to-income ratio of 36% or less, and a mortgage payment that does not exceed 25% of gross monthly income. If your debt thresholds exceed these percentages, you could have difficulty repaying existing debt while you invest for retirement or other long-term goals.

2. Investigate refinancing options. With rates on fixed-rate mortgages averaging around 5%, you may want to consider refinancing an existing mortgage. You’ll really have to crunch some numbers to determine if you can lower your monthly payment by a significant margin. Don’t forget to factor in closing costs and to think about how long you plan to stay in your home. If you’re planning a move within five to ten years, you may not recoup the cost of refinancing.

3. Know your credit score. The best deals on credit go to the applicants with the highest credit scores. To check yours, request a free report annually at Tips for maintaining a good credit score include paying your accounts on time, keeping balances low, being conservative in the amount of credit you use at any given time, maintaining older accounts, and maintaining a diversified credit mix.

4. Search for lower credit card rates. Pay attention to mailings from credit card companies where you have accounts. Because of rising delinquencies attributed to the recession and new laws that take effect in February 2010, many banks are raising interest rates, reducing credit lines, and imposing higher fees, even on borrowers with good payment histories. If this has happened to you, you can try shopping for better terms, but some observers believe that banks are likely to tighten access to credit going forward — leaving many consumers with fewer options than they had in the past. Paying more than the minimum payment due each month can really help reduce interest costs over time.

5. Start an emergency fund. You never know where or when an emergency will happen, but you can take steps to prepare. Setting aside a little every month — and having the discipline to not tap into that money unless it is absolutely necessary — will go a long way toward helping make situations less stressful when the unforeseen happens.

© 2011 McGraw-Hill Financial Communications. All rights reserved.

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