Investment Scam # 10 Variable annuities

/Home/Notorious Frauds and Tips on Avoiding them/How to Avoid Common Fraud Schemes/Most Prevalent Investment Scams

Variable annuities. As sales of variable annuities have risen, so have complaints from investors -- most notably, the omission of disclosure about costly surrender charges and steep sales commissions. According to the NASAA, variable annuities are often pitched to seniors through investment seminars -- but regulators say these products are unsuitable for many retirees. Lambiase says variable annuities make sense only for consumers who can afford to have their investment locked up for 10 years or longer.

"Our fight against fraud never stops because each year con artists discover new ways to fleece the public," says Lambiase. "Sadly, many of the age-old scams still work to cheat victims of their hard-earned savings as well."