Life Insurance, Annuity Fraud Scams Count on Victims’ Silence

Like many areas of finance and investment, annuities are not right for every situation, and fraudsters can exploit the complexities of these financial tools to take advantage of their victims. And unfortunately, many perpetrators of fraud target the elderly.

Annuities are a type of investment designed to provide steady payments. Typically, investors pay a set amount of money, and after a set amount of time, they are paid back the initial principal and interest in the form of steady payments, often monthly. Under some circumstances, annuities may offer certain tax advantages. But fraudsters may exaggerate the benefits

Fraudulent annuities can operate in a number of ways. Many annuities include an early cash-out option, but in fraudulent annuities, such penalties are much steeper than they would be in a real annuity, typically greater than 14% of the principal. Additionally, annuities tend to be of a “balance breakfast” approach to investing; most experts recommend that annuities make up less than 35% of an individual’s investment portfolio. It is also a red flag when a single agent recommends someone cash out their annuities and replace them with new ones, as annuities are the sort of investment that works best when left to sit. Another major warning sign is the length of time before the payments start. Many fraudulent annuities that are sold to the elderly have such a long waiting period that elderly investors are unlikely to see a return on their investment.

Like many forms of fraud, annuity fraud frequently targets elderly members of the population. This is for a number of reasons. First, seniors often have nest eggs that require financial management, and they are more likely to consult financial advisors, some of whom may be fraudsters. Additionally, seniors may qualify for fixed income payments, making them even more tempting targets. For example, some types of fraudulent annuities have been discovered targeting veterans, trying to get at their VA benefits, while others target SSI recipients.

Unfortunately, these frauds can thrive partly because people are afraid to come forwards. No one likes to admit that they’ve been had, that they’ve fallen for a scheme. But this is the sort of misfortune that can befall anyone, and it’s important not to let fraudsters get away with such actions.   Hundreds of lawsuits have been filed against the perpetrators of annuities fraud. These annuity fraud lawsuits seek to recover monies lost to annuities fraud, or enforce the terms of it, depending on the nature of the fraud.

If you or a loved one has reason to believe you have invested in fraudulent annuities, you may be entitled to compensation. You can start to explore your options by visiting the Life Insurance, Annuities Fraud Class Action Lawsuit Investigation. Here, you can enter information about your situation for a legal review by a trained expert in this area of the law. The initial consultation is completely free of charge, and from it, you can receive valuable legal guidance on the best steps to take in your exact situation.