'Financial Self-Defense for Seniors' offers tips on financial security

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The stories sound too outrageous to be true.

An elderly woman in need of cash asks her housekeeper to drive her to the bank to apply for a reverse mortgage. She's escorted to the housekeeper's banker boyfriend, who dupes the woman into signing for a conventional mortgage. When she can't make the payments, she loses her home.

A 78-year-old man, dying of cancer, is persuaded to buy a variable annuity. The transaction generates a big commission for the seller but locks up the man's money for five years if he wants to avoid huge surrender fees.

Both are real-life situations described in a new consumer guide for older Americans and their families aimed at helping them avoid being conned out of their money.

The free 28-page guide -- "Financial Self-Defense for Seniors" -- was written by Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards, the nonprofit group that sets the educational and ethical standards for the Certified Financial Planner designation.

"It's essential that elders ... be provided the tools to defend themselves," Ms. Blayney said.

The guide offers 10 red flags for identifying potential financial abuses and strategies for avoiding them.

For example, one potential tip-off is being told, "Don't worry about the details," of a financial product because "they'll just confuse you."

Ms. Blayney recommends never investing in a financial product without understanding the fine print, and getting a second opinion before buying.

Important questions to ask include, "Can you get your money when you need it? Will you pay a fee or penalty to get your money? What are the risks? What will the financial professional be paid if you buy the product?"

"Make sure you understand the answer," Ms. Blayney said.

Older adults are particularly vulnerable to financial fraud because they often have substantial savings that make an attractive target for scam artists. Health problems and cognitive impairment also can make seniors susceptible.

Victims often endure financial abuse in silence, Ms. Blayney noted, because they are embarrassed or afraid to report it, or because they are unsure exactly what happened to them.

Besides recommendations for fighting financial abuse, the guide offers resources for checking the background of a financial adviser (including disciplinary record), reporting elder fraud and identifying other resources for preventing abuse.

To read the guide, visit www.cfp.net/financial-self-defense-for-seniors.

Free copies also are available by mail by calling 1-800-487-1497 between the hours of 8:30 a.m. and 6:00 pm., Monday through Friday.

businessnews - yourbiz

Patricia Sabatini: psabatini@post-gazette.com or 412-263-3066.


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