
Annuities are a common way to ensure financial security during retirement, or at least that is what many agencies would have you believe. Annuities can be an excellent way to set money aside for retirement if you choose the right one for your lifestyle and know the many fees and rules around withdrawing your money. Many annuity scams target seniors, including those who are retired or are looking to retire soon.
Unfortunately, many also target seniors who are ill and suffer from dementia or Alzheimers. Annuity scams impact more than just seniors, but seniors are the most often targeted and can be particularly vulnerable.
One of the reasons seniors make excellent targets is because it is proven they are less likely to come forward and report the scam. Seniors who have been scammed out of money often fear judgment from others or are embarrassed about it happening to them.
However, the last thing any senior should do if an annuity scam has impacted them is to keep it to themselves. If the agent is caught and found guilty, your money can be recovered. And seniors should never feel embarrassed for being a victim of a scam; you have done nothing wrong. Finally, if for no other reason, if you come forward and talk about what happened, it may help to both protect others from that criminal as well as give them the courage to come forward too.
We have provided information on each of the top four annuity scams, how to identify them, and where to report them.

Top Four Annuity Scams
- The Senior Scam
- Expired Annuity
- Fake Certifications and Bogus Designations
- Risk-Free
The Senior Scam

The senior scam specifically targets seniors who are terminally ill or mentally ill. These scams are quite common; the agent will attempt to sell seniors new annuity contracts under the pretense that the money is set aside and is safely locked up for the specified beneficiary.
However, after the owner of the annuity passes on, the money goes to the agent instead of the beneficiary. Scams such as this are why it is essential to ensure you are checking with an outside source to help read over the contract before signing anything or investing money.
The other senior scam targets seniors who have dementia, Alzheimers, or those who may confuse easily when it comes to financial decisions. Often those who suffer from cognitive dysfunction trust more easily and often have difficulty understanding the annuity contract.
Scammers use a senior’s vulnerabilities to their benefit, often preying on their fears. Those selling annuity scams to seniors will use scare tactics such as telling them that their retirement will not last or that their money is not safe in its current location.
To avoid being scammed take the time to:
- Consult a trusted friend, family member, or attorney who understands annuities and ask them to read through the contract
- Check for fees such as for withdrawals and annual fees.
- Research the agent and agency to check their license and if they are tied to scams.
- Never write a check to the agent
Expired Annuity

Those who have an existing annuity may be contacted regarding your annuities expiration, inquiring if you want to re-enroll and encouraging you to act now before it expires.
Notifications are often received via mail in the form of a postcard or a phone call. And though annuities do expire, most are set to do so when the owner of the annuity is 115 years old.
The postcard or phone call is not from the company you have your annuity with and is instead a marketing company fishing for information. If you call the number provided, the agency will attempt to set up a meeting for someone to call you back or, more likely, have an agent stop by to talk with you.
If you let a scammer in, they are smooth talkers and rarely walk away without a signed contract. These scammers will attempt to “modernize” your annuity to help ensure that it maximizes your investment while ensuring it lasts the rest of your retirement years.
To avoid being scammed:
- If you have concerns call the company that holds your plan directly
- If you receive a postcard telling you your contract is about to expire, tear it up
Fake Certifications and Bogus Designations

One of the most effective tools annuity scammers use to get money from seniors is promoting false certifications and using bogus designations.
Fake certifications are a common way scammers lull us until believing their trustworthiness and expertise. Many, not all, scammers have little to no financial background, but stating they have specific unverifiable certifications builds their credibility.
Additionally, some will say they have specific licensing, which can and should be checked; scammers just assume potential clients will not take the time to verify their credentials. This type of issue happens with other scams too, like Social Security scams and health insurance scams.
Bogus designations include examples like:
- Certified Senior Adult Consultant
- Financial Consultant
- Trust Advisor
- Paralegal
- Senior Estate Planner
Unfortunately, there are few laws around making up and using bogus titles. Plus, scammers know that titles are often an excellent foundation for making them look more knowledgeable and professional.
To avoid being scammed:
- Take the time to investigate if the person is licensed.
- Ask to see their certifications and check online to verify that the certifications are from valid certification programs.
- Put little to no stock into a person’s title when it comes to annuity contracts
Risk-Free

Always be wary of the “Risk-Free Guarantee,” especially if the advertisement suggests a high return on investment. Though there are risk-free annuities, they are never high return investments. Risk-free annuities are referred to as fixed annuities, and though they convert your investment back into a monthly income, they are not high earning.
High return investments come at significant risk. Annuities can be tied to stocks, which, if doing well, can come at a reward. Conversely, if the stock is doing poorly, you may lose your investment. Annuities that are riskier may be labeled variable, deferred fixed, or indexed.
To avoid being scammed:
- Recognize that the phrase risk-free is a red flag
- Read the contract carefully and request help from a family member, friend, or attorney to look the contract over with you
- Understand the fees and withdrawal information
Additional Tips

In addition to the tips above, one of the top things you can do to avoid being scammed is to learn the definition of the various terms used throughout your annuity contract. Most people, not just seniors, are easily overwhelmed by a document full of unfamiliar jargon.
There are multiple sites online that you can find definitions of the financial terms and explanations on how different annuities work.
Look for and identify common red flags such as:
- Big promises
- Annuity contracts that seem too good to be true
- Scare tactics
- High-pressure sales
- Telemarketers
Who to Report Annuity Scams To

If you think you have been a victim of an annuity scam, you will want to report it to the FTC. You can call them at 1-877-382-4357, or you can go online and file a complaint at ftc.gov/complaint.
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