Generalizations Can be Harmful to Consumer’s Financial Health

In a USA Today article, written by Greg Farrell, entitled SEC targets investment scams aimed at seniors, he has fallen hook, line, and sinker into the journalistic trap of allowing previous misstatements and generalizations about this topic to fuel inaccuracy and misleading assumptions in his own article. The subject of his piece is addressing concerns that, as baby boomers continue to reach retirement, there will be increasing motivation for scammers to come up with ways to profit from this enormous amount of retirement money looking for a home. Since the first use of currency, preying upon opportunity has been a given practice of the underside of human nature, and it would be surprising if there were not swarms of deceptive practices meant to get rich from this rising tide of retirees. But besides his stating the obvious, as Farrell tries to explain with examples, he resorts to generalizations in a way that implies that all such practices similar to the ones he cites are scams aimed at harming seniors. He mentions seminars that “promise” to provide a free lunch, as if the scam he is concerned about is that the promise of lunch would not be fulfilled, and the seniors would go away hungry. The other inference Mr. Farrell makes is that seniors are an “increasingly vulnerable group,” as if when this group grows older, they also grow stupid, making them more likely to make bad choices and decisions when confronted by any shyster who offers them a free meal. The generalization that really provides the greatest amount of disservice by misleading the readers is his accusations that “high-pressure sales pitches (are) designed to get older Americans to put their assets into unsuitable investment programs, such as annuities.” Since the only annuity product that is classified as an investment is a “variable” annuity, we have to assume Farrell is insinuating that they are an unsuitable investment program for senior adults. I wonder if the SEC or the NASD would agree with this broad assumptive statement. And of course, if you hear about such a financial product at a “seminar” where there is also free food, then there must be something rotten afoot, so beware. This kind of article, in such a prominent publication is irresponsible journalism. Seminars provide a perfect venue for someone to anonymously check out any type of program without obligation or commitment. At a seminar someone can evaluate if they want further information or if they like and believe the presenter, all from the safety and comfort of the back row, if they so choose. If Farrell is insinuating that simply because you provide a free lunch, that you will suddenly impair a lifetime of intelligence and the ability to made good judgments in a senior, then the next article he writes should be an apology for insulting a complete generation of people whose lives have proven that they get wiser and more street smart with age. Scams come and scams go, but the wise will always survive. Perhaps the real answer is that these people are willingly making decisions to buy these products with no coercions whatsoever, because they have evaluated them, they understand them, and they believe them to be exactly the product that meets their needs. Let’s give the seniors some credit and stop generalizing them as stupid, weak, and vulnerable individuals who will fall for anything when their stomachs are full. It is Mr. Farrell who is the one who has provided the scam in this instance.