Department of Financial Institutions
DFI and AARP Partner to Offer “Free Lunch Seminar Monitor” Program
FRANKFORT, Ky. – Nov. 6, 2008 – Most people know there is no such thing as a “free lunch.” Yet, four out of five investors age 60 and older received at least one invitation to a free investment seminar in the past three years – and three out of five received six or more. The invitations generally promise to educate consumers about investing strategies or managing money in retirement, usually with a meal provided at no cost.
The Kentucky Department of Financial Institutions (DFI) is working with AARP to recruit “Free Lunch Seminar Monitors.” These volunteers are provided tools and tips to spot the warning signs of a scam, and may assist state regulators in the fight against unscrupulous promoters and questionable investment practices.
Volunteers simply download a checklist from www.aarp.org/nofreelunch, attend a seminar held in the local community, and return the checklist and notes to AARP at the address noted on the Web site or to firstname.lastname@example.org. AARP then sends the information to your state securities regulator – Kentucky DFI’s Securities Division – for evaluation and possibly investigation.
A recent year-long examination of free lunch seminars conducted by state securities regulators, the Securities and Exchange Commission and the Financial Industry Regulatory Authority found that while many free meal financial seminars were advertised as “educational” or “workshops,” 100 percent of the “seminars” were instead sales presentations, 50 percent featured exaggerated or misleading advertising claims, and 25 percent involved possibly unsuitable recommendations to attendees.
“Instead of unbiased financial education, many free-meal seminar attendees are being fed a hard sales pitch for investment products that are often unsuitable,” said James Strode, Securities Division director. “We appreciate the opportunity to work closely with AARP and its membership to put unscrupulous salespeople on notice that the victimization of senior investors will not be tolerated in this state.”
DFI’s participation in the Free Lunch Seminar Monitor Program is part of a national campaign launched by AARP and the North American Securities Administrators Association to monitor whether investors are being pressured into purchasing inappropriate or unsuitable investments. For more information on the program, visit www.aarp.org/nofreelunch.
“AARP knows that educating consumers to spot deals that may be too good to be true is the best defense against becoming a victim of financial fraud,” said AARP Kentucky State President Dr. Karen Cassidy. “We’re urging our members to be cautious and look out for warning signs, take their time in making financial decisions, and ask hard questions while attending these lunches.”
DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve the public through effective and efficient regulation that promotes consumer confidence and economic growth.