When will the scammers be stopped?

Once again, the media is being flooded with various stories of retirees being scammed out of their life savings and that despite a lot of huff and puff by politicians, very little seems to be done about it.

Just this week, the Australian Financial review has highlighted how one retiree lost some $2.5 million investing in what he thought were fixed interest or basically terms deposits being offered through a company called Macquarie Bank Capital.

The situation is made worse because it seems older Australians are the most vulnerable to scammers. That while you might not think people over sixty are using social media, they are.

More, in doing so they are particularly vulnerable. They are easily persuaded that glossy websites and eloquent and persuasive emails are the signs that all is good when younger people seem to be more guarded.

So how do you protect yourself from scammers. Here are five tips.

Firstly, keep your finances simple. Once you retire you really should own your own home and have all your remaining assets held safely within a quality superannuation account where they are invested for the long term.

Secondly, be cautious. Never give your bank details or access codes to anyone you don’t know extremely well, particularly if you are dealing with them via the internet or via email. This is where most people get scammed.

Thirdly if you are transferring money to a new investment provider, start off slow. Just transfer say $100 to make sure that you have the right account details and if everything is fine then progress to transfer larger amounts.

Fourthly, be skeptical. If something sounds too good to be true it most likely is. Most people fall victim to scammers because they suspend all common sense and hope that the investment advice, they are being given is true.

So, they don’t ask why a particular terms deposit is being offered at a much higher rate than say the same term deposit being offered by the Commonwealth Bank.  They just want to believe that somehow, they are cleverer than everyone else in the market in finding this particular good deal.

Finally, if the rate of return offered is higher than similar investments elsewhere, it is because the risk is higher. There is just no getting away from that simple fact. So if you stumble across something that is offering an extra good rate of return, ask yourself why, what are the added risks.

Of course as a professional adviser I should also add that if you have any concerns about managing your own funds in retirement then you should seek out qualified professional advice. I know its an added cost when times are so hard, but its better than falling victim to scammers and  loosing millions.