Seniors: Beware of financial scams

Many people find it increasingly difficult to make ends meet in today's troubled economy, whether because of mortgage woes, high fuel costs, job insecurity or other financial problems. If that weren't bad enough, predatory con artists target these vulnerable folks with increasingly sophisticated scams designed to cheat them just when they can least afford it.

Seniors are particularly at risk because they often live on fixed incomes, face increased medical costs and are looking for ways to make their savings keep up with inflation.

Here are a few troubling frauds making the rounds:

Retirement investment scams. If you're over 50, your mailbox has likely been flooded with offers to attend free–lunch financial seminars that promise to significantly boost your retirement savings returns. While some are legitimate, others use high–pressure sales tactics to steer seniors into risky, fee–heavy investments or annuities, or sell them products they don't need or that are impractical for their situation.

Before entrusting your hard–earned money with anyone, particularly from an unsolicited offer, do your homework. The U.S. Securities and Exchange Commission offers comprehensive advice to help seniors manage their investments, including key questions to ask investment advisors (www.sec.gov/investor/seniors.shtml).

Other helpful sites include the North American Security Administrators' Fraud Center, which provides tips for spotting con artists, top investor traps and more (go to www.nasaa.org and type “Fraud Center” in the search engine), and AARP's Investment Fraud Center (visit www.aarp.org/sitemap and click on “Be a Wise Consumer” under “Money and Work”).

“Foreclosure rescue” scams. The Better Business Bureau reports an alarming increase in unscrupulous companies preying on homeowners facing possible foreclosure because they can't meet their mortgage payments. Some companies promise to negotiate with the lender on the owner's behalf – for a sizeable upfront fee.

Others use more nefarious practices such as "equity skimming," where they convince the homeowner to add an investor's name to the home's title, in exchange for lowered payments while supposedly working out a payment plan with the lender. This ruse drains equity from the home and often results in owners losing their homes and being left even further in debt.

It's far wiser to call your lender directly as soon as you think you may have trouble paying your mortgage. Also consider working with a U.S. Department of Housing and Urban Development–approved housing counselor. To find one, visit www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 800-569-4287.

Fake check scams. The countless variations on this scheme usually involve someone offering to buy something you're selling, provide an advance on a contest you supposedly won or pay you to work at home. They'll send an authentic-–looking check for more than the correct amount and ask you to wire them the difference.

Meanwhile, the check you deposited is fraudulent. Even though your bank may initially clear it, you are responsible for making good on the money when the check ultimately bounces – you could even face legal charges. Bottom line: There's no legitimate reason for someone giving you money to ask for funds to be wired back. For tips on spotting and avoiding these and other check scams, visit the National Consumers League's fraud center at www.fraud.org.

It's a good idea to consult a financial professional about any decisions concerning your money. If you don't know one, www.plannersearch.org is a good place to start your search.

Bottom line, remember the old sayings: "There's no such thing as a free lunch," and "If it sounds too good to be true, it probably is."