March 21, 2017

Consumer Alert: Department of Insurance Advises Senior Citizens to Beware of Fraudsters Offering "Free Lunch"

Insurance Commissioner Jim Donelon is advising senior citizens to be on the lookout for scammers offering financial services. While the majority of the brokerage firms, investment advisers and investment firms are legitimate, it’s important to note that like many other professions, there are those individuals and firms that are not ethical.

“Whether they call themselves ‘senior specialists’ or offer ‘free lunch’ seminars, there are countless individuals trying to take advantage of seniors who have accumulated a lifetime of savings,” said Commissioner Donelon. “Older Americans are among the fastest growing segments of investors and it’s unfortunate they’re often the target of deceptive marketing and sales tactics.”

The Louisiana Department of Insurance offers the following tips to reduce the risk of becoming a victim of fraud:

Question the credentials of “experts.”  Individuals often boast designations and credentials using terms such as “certified”, “senior advisor” or “senior consultant” to convince people they have special expertise to help seniors choose investment strategies. This may not be true.  While some organizations require members to complete a difficult study program and pass extensive exams to earn designations, other organizations have much less stringent requirements that can be completed in a three- or four-day course or earned simply by paying a fee. Ask about the financial experts’ qualifications and track records and check them out for yourself.  

Beware of the “Free Lunch” Investment Seminar. According to a report from FINRA (Financial Industry Regulatory Authority), four out of five investors 69 years and older received at least one invitation to a free lunch investment seminar in the past three years and three out of five received six or more. Federal regulators examined 110 firms that offer free lunch seminars and found that every seminar was a sales presentation. Such seminars often use enticements, including free meals and door prizes or claims of “urgency” or “limited space,” in order to encourage you to attend. You should be aware that if you give contact information on a registration form, that information will be used to solicit you for future sales and marketing efforts.  

Does this product make sense for you?  Always be sure you understand what is being sold. Do not hesitate to ask questions. Financial products can be complicated even for the most informed consumer. The product must be right for you, your lifestyle, your financial goals, and your tolerance for risk. It’s rare that one product will meet the financial needs and goals of everyone attending a seminar.

Never make a final decision at a seminar. If you attend a seminar, you may be exposed to high pressure tactics and promises of amazing financial returns. Consider obtaining a second opinion from an accountant or other professional who will not benefit financially from the sale.

If you feel that you may have been pressured into purchasing a product or if you feel that you may have been misled during a sales presentation, do not hesitate to contact state regulators for assistance. If you have questions about an individual offering an insurance or annuities product, contact the Louisiana Department of Insurance at 1-800-259-5300; for securities products contact the Office of Financial Institutions Securities Division at (225) 925-4660.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting