Clark Howard's Tips

December 28, 2006

Clark gets very peeved when criminals and scam artists ripoff senior citizens. And annuities are one product these low lifes are trying to push. They're trying to make a big score off someone who has worked hard his or her whole life, only to have it stripped away in old age.

Some banks and insurance companies are guilty of this. When a senior citizen goes into a bank to cash out a CD, the person there tries to get them to put that money into an annuity.

Equity-indexed annuities, in particular, earn huge commissions for banks, so they push them hard. And the biggest targets are widows in their '70s and '80s. In addition, if they try to get out of the annuity they may pay up to 25 percent in penalty fees. And often, if they're conned into these trashy products, they don't see their first penny until they have passed on.

There is a fight going on right now between the Office of the Comptroller of the Currency and the Supreme Court. The OCC wants to make it law that banks can push these products and take peoples' money without any consequences. We'll see how it all plays out and let you know.

But right now, you have a duty and responsibility to protect your parents and other senior citizens you know. Your parents raised you and now they need you.

Anytime someone from an insurance company or bank tries to sell your parents an annuity, tell them to leave immediately. That organization is trying to steal their money, and that is all you need to know.

Consumer advice courtesy of