In the eponymous children’s tale, Pinocchio, the puppet protagonist, magically transformed into a” real-life boy,” joyfully returns to his father and (woodcarver) creator, Geppetto, but only after learning a painful lesson in naïve trust. The obvious lesson for all of us is to avoid blindly trusting in the representations of strangers who may not entertain our best interests.
Senior citizens, particularly the elderly, many of whom are physically confined to extensive sedentary periods, (during which television viewing is a frequent practice) are the most vulnerable to the Pinocchio-like lure of many shameful and tactically aimed television advertisements. The obvious and natural concerns of this segment of the public, health, finances and comfort, are tactically exploited by irresponsible, and avaricious advertisers, feigning concern and promising needed solutions. We have selected two, as illustration, which we consider the most shameful and Pinocchio-like, targeted shamefully at the Senior Citizen.
- Purchases of Life Insurance Policies by Insurer:
This is a particularly reprehensible scenario which, unless one is desperately strapped for cash, should be avoided. The actuarial profession is specialized in the determination of the dollar amount of premium to be charged to the insured, relative to the respective policy desired, based essentially upon his age. Naturally, the younger the policy holder, the longer is his future life expectation, and the larger the amount of premiums he will have paid prior to his decease, when the policy proceeds are to be paid.; viz., the older the insured, the greater the premium.
Television advertisements featuring happy senior citizens, joyfully celebrating the receipt of proceeds received from the sale of their life insurance policies (back) to the Insurance company is, without doubt, a true Pinocchio scam. Older people are, as a matter of practicality and actuarial arithmetic, closer to the insured event, their demise, and the consequent pay-out of the face amount of the policy, to their designated beneficiary. A sale back to the insurer of the policy, at such time, releases the insurer from contracted obligation of payment of the proceeds of the insurance policy [for which you paid actuarially calculated premiums]. It releases the insurer but deprives your beneficiary of the paid for and intended benefit such insurance. It is an unfair windfall to the insurer and a Pinocchian way to obtain needed financing.
- Reverse Mortgages. As every homeowner knows, the greater the total amount of mortgage payments made on the purchase money mortgage, the larger the amount of the equity owned in the home. People who reside in their home as their primary residence, and have attained the age of 62 (or older) may enter into a transaction by which they encumber their equity in the realty, for a loan against that accumulated equity, known as a “reverse mortgage,” while still, for whatever it is worth, remaining the “record title owners” until decease, or removal, when the “loan” becomes payable.
The Pinocchio style television pitch for this potentially questionable product has been made by a heavily mustached, older looking, tweedy and reverential, Tom Selleck, or by the established Delphic oracle of the senior citizen set, Alex Trebek. The purported benefit of this transaction is emphatically emphasized (getting needed money) but none of the vital details involved in these transactions are ever mentioned, in this indiscriminate, Pinocchian pitch. We, out of a sense of felt responsibility, have listed below, the major considerations and questions, pertaining in this type of transaction:
- Is there a charge or finder’s or origination fee, which may be submerged into payments under other designations in the transaction?
- What is the amount of the loan ( fair valuation of the equity).
- What is the interest rate? How is it calculated (or compounded) to the date of repayment (decease, removal or sale).
- Are there family members residing in the realty, besides the named borrower?
- Is the borrower aware that taxes and insurance premiums remain his obligation?
- Is the borrower aware that all maintenance, upkeep and repairs are his obligation?
- Is the borrower aware that a breach of any obligation can result in foreclosure?
No one should enter into such a transaction without the advice of a family attorney or s other qualified person, with, solely, the homeowner’s interest in mind.
There are several other instances of advertisers’ shameful elongations of the Pinocchian wooden nose, that we have been included in earlier writings. The potentially harmful practice of irresponsibly hawking medications to the public, knowing nothing of a potential purchaser’s medical history, or condition. [ One should (solely) rely upon his physician and not on potentially harmful advertisements.] Personal injury attorneys who advertise that no fee is payable, unless they get the client money [ as their shameful and unprofessional sales pitch] are not offering any special offer; the law specifically mandates that, in personal injury cases, no fee is payable unless there is a recovery. Lastly, the assertion by any bankruptcy lawyer that bankruptcy “is a new beginning,” without revealing any future impact on the bankrupt’s future credit possibilities, is not revealing the entire picture.
We earnestly suggest that, to avoid being a modern- day Pinocchio, professional assistance should be selected only after reasonable inquiry, the advice of experienced friends, but, most assuredly, not from television commercials.