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David N. Kirkman
Task Force Alert
Asst Attorney General
Consumer Protection
NC Department of
P.O. Box 629
Raleigh, NC 27602

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North Carolina Division of Aging and Adult Services

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More Warnings About "Free Lunch" Retirement Seminars for Seniors

Task Force member John Maron of the Department of the Secretary of State shares the following investment alert issued by his agency:

Investment Alert

The Securities Division of the NC Department of the Secretary of State wishes to direct your attention to a story about investment frauds aimed at senior citizens that aired last week on The Today Show. You may read the story or view the video clip by clicking on this link: The segment, entitled “Beware of ‘free’ seminar and other retirement scams,” warns of over-hyped investment opportunities and offers tips on identifying the warning signs of possible fraud, including:

Ignore the hype
Be suspicious of any sales pitch that promises unrealistic returns. Anyone who guarantees annual returns of 12% or higher isn’t in the ballpark — that’s even higher than the long-term average return for large-company stocks, and much higher than guaranteed investments. Be particularly wary of claims that you can retire early based on those high returns — a common pitch salespeople use when they hear that a company is making early-retirement offers.

Be skeptical of ‘free lunch’ seminars
Salespeople often make their initial contact with seniors in “free lunch” seminars. But in a sweep of these types of seminars, the Securities and Exchange Commission found unethical business practices in nearly half. And don’t trust a salesperson just because he or she has a professional designation that focuses on seniors. Such credentials sometimes require little more than paying a fee and passing an easy take-home test.

Ask about surrender charges and guarantees
Before buying an annuity, ask specifically about surrender charges and how much money you can withdraw each year. Many deferred annuities levy a surrender charge if you try to withdraw your money within the first seven to 10 years. Also ask about interest guarantees. Some annuities offer a bonus in the first year, after which the minimum guarantee drops to 2% or 3%. Ask for a written summary of everything you discuss with the salesperson.

The Securities Division urges every investor to call our office (1-800-688-4507) to check the registration status of his or her broker or investment adviser, as well as the registration status of the securities offering itself, before writing a check or transferring assets to anyone. A quick call to our office could prevent you from becoming a victim of investment fraud. For more information on how to protect yourself, visit our website,, and click the yellow box marked "Investment Securities". You may also contact me at the following:

John Maron
Investor Education Coordinator
Securities Division
NC Department of the Secretary of State
PO Box 29622
Raleigh, NC 27626-0622
Telephone: (919) 715-1067

******End of Alert******

Date: March 18, 2008

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