Is the financial services industry perfect? No, but then what industry is? The industry has been implementing compliance and suitability regulations that have helped save many consumers from wayward advisors. Unfortunately, a few bad apples can cause irreparable damage to those clients they harm. Eight consumers speak out about investment scams below.
Have you or someone you know been the victim of a scam?
"About 20 years ago, my nephew got involved with a woman who was a terrible drug addict. It didn’t take long before my nephew was doing drugs, too. My brother, well, he thought his son could do no wrong, and when he got Alzheimer’s, he gave his son power of attorney. What a mistake! Next thing he knew, his son and the girlfriend had disappeared with a huge chunk of his money."
— Paul, 83, Olathe, Kans.
"Unfortunately, yes. I have been the victim of a pyramid scheme. Many years ago, I had a friend who was working for a group that sold vitamins. She introduced me to it, took me to a few meetings. She seemed to be doing well and convinced me to join up. Fast forward a few months: the entire thing collapses and everyone loses their investment. She’s not my 'friend' anymore."
— Gina, 70, Bend, Ore.
"Almost. I am embarrassed to admit that I got one of those emails where they tell you you’ve won the lottery and the crooks are in Nigeria or somewhere far a way where you can’t get at them. I clicked on it, but something about it didn’t seem right to me. Also, I couldn’t remember entering any lottery. So, when my daughter came to take me to the doctor, I asked her if she had entered me in a lottery. That’s when she told me it was a scam."
— Anna, 78, Pine Bluff, Ark.
"Oh, my goodness, it is such a worry. We seniors are generally pretty trusting. We don’t think there may be people out there trying to take advantage of us. I guess I’d say that the timeshare my husband and I bought into was kind of a scam. When we realized how hard it was to actually book a condo — the best locations were always taken — we felt a little like we’d been scammed."
— Cassie, 74, Corte Madera, Calif.
See also: Protect your elderly clients
"Back in the ‘60s, my parents were talked into investing in a bogus company. My father was a history teacher, and teachers don’t make a lot of money. His childhood friend became a doctor who convinced him to invest in a medical products company. The doctor said he had checked it out and everything was on the up and up. Come to find out the company wasn’t a real company, just a P.O. box, and the doctor lost his shirt. Those bastards stole $10,000 from us."
— Clay, 58, Bartlett, Tenn.
"No, thank God. That is, unless you count the $175 I spent on baldness treatments that never worked. Never buy anything off the television!"
— Chance, 65, Katy, Tex.
"I have a very close friend — we’ve known each other for 30-some-odd years. She had gotten married real young and then got divorced. When her kids left her, she decided she wanted to start dating again and met a man online. He seemed perfect at first, but I was suspicious. He was a little too perfect, you know what I mean? When she started putting him on her accounts, I warned her to be careful. But she was head over heels. She would’ve done anything for him. He robbed her blind, of course, and then took off. It was so sad to watch; my friend was devastated."
— Bonnie, 57, Helena, Mont.
"Some years ago, I bought some shares in a mutual fund that had been recommended by an online brokerage. The brokerage firm didn’t tell people that this 'recommendation' was actually an ad paid for by the fund. Apparently, it was an attempt to manipulate the fund price by insiders. There was a class-action suit, but I don’t think anyone ever went to jail or anything. Just a slap on the wrist. Lost about $1,300 on the deal."
— Dan, 60, Lancaster, Pa.
For more from Daniel Williams, see: