PYRAMIDS, SCAMS, AND SCHEMES AIMED AT SENIOR ADULTS

PYRAMIDS, SCAMS, AND SCHEMES AIMED AT SENIOR ADULTS  

Financial schemes consistently pursue the body of Christ and especially senior adults. While the wolves may slightly change their sheep’s clothing, certain themes always emerge. Seniors must be alert to protect themselves from these “can’t miss” investment schemes. Almost every scheme aimed at seniors promises high returns without risk and contain some of the following components:

• Offshore activities include hedge funds, money funds, products, precious metals, or precious stones that exist outside the United States . Some pyramid schemes contain an offshore component in order to make it difficult or impossible to verify the facts of the activity or keep it from being scrutinized.

• “Insider deals,” “secret information,” “getting in on the ground floor,” and “no one else knows about this” are phrases that should cause you to pause. These phrases mean that the opportunity will not withstand scrutiny, is not proven, or has no track record of success—all of which spell high risk. If you cannot afford to lose it all, do not invest it in “insider deals.”

• Any time you are being paid fixed interest rates that are substantially above market rates , your investment is at risk. Why? The borrowers who ultimately must pay you the premium interest rate cannot borrow at lower rates because their credit is high risk. Many “church” loan funds have experienced scandal and investors have lost all or a portion of their funds because the funds were invested in speculative real estate transactions unrelated to church lending or unsecured loans without corresponding loan loss reserves. Church loan funds are a wonderful way to build the kingdom, but make sure the fund you invest in is sound.

“He who hastens to be rich will not go unpunished” (Proverbs 28:20b). Protect yourself from “can’t miss” investment opportunities and promises of high returns without risk.

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