Tuesday, December 02, 2008

Warning To Seniors About Free Lunches

Free Lunch Seminars May Lead To High Pressure Sales Pitch

LABELLE, FL. --  Attorney General Bill McCollum and Department of Elder Affairs Secretary E. Douglas Beach this week issued a consumer advisory urging senior citizens and their loved ones to think twice before taking advantage of so-called financial planning seminars or estate preservation workshops that use a "free lunch" to lure seniors to attend.

The Attorney General's Office has received complaints from seniors enticed to attend a free meal that actually turned out to be a high-pressure sales pitch for investments that may be entirely inappropriate for the individual based on his or her age and financial circumstance.

The invitations to the free meal often arrive via phone or mail and promise tips on earning great financial return with minimal risk, eliminating taxes or avoiding probate. After a high-pressure presentation, salespeople then try to schedule follow-up visits in the homes of those who attend so they can continue the pitch. In addition to losing money, consumers who complained to the Attorney General's Office reported being badgered by multiple unsolicited phone calls and frustrated by misrepresentation of the
seminar's purpose.

AARP and the Financial Industry Regulatory Authority (FINRA) recommend that seniors do not purchase anything or open an account of any kind at a free-meal seminar. Seniors should also consider asking the following questions of any investment proposal:

-     What are the risks of this investment?
-     How much does it cost initially to purchase the investment?
-     What, if any, additional or ongoing costs will I have to pay?
-     How liquid is this investment? If I need to sell or cash in the
investment, how readily can I do so?
-     Will my investment be tied up? If so, for how long?
-     What happens if I decide to sell or cash in my investment? Are there
surrender charges or other fees?
-     For what type of investor is this investment a good idea? For what
type of investor is this investment a bad idea?
-     Is the investment registered? If so, with which regulator?
-     Are those offering the investment opportunity willing to give
information to me in writing?

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