uglierdogHere’s how they do it.   They take a smidgen of truth and then exaggerate it to a point where the truth is concealed amongst layers of lie after lie.   This is the methodology of an increasing number of Internet marketers who target seniors or unsophisticated investors.   One such marketer is the “Palm Beach Letter” which has been trumpeting the “secret 770 accounts” for a number of years.   They’ve essentially taken a female chihuahua and are marketing it as Kim Kardashian.  Yet the two have nothing in common, save for a specious argument that they are both bitches.   The only real truth is that this scheme is a dog and an ugly one, at that.

Recently, the Palm Beach Letter email-bombed the Internet with a “Last Chance: Claim $60,000 in Social Security” warning.   The notorious Palm Beach Letter has been targeting seniors for years, hawking questionable and complicated investment schemes.  Its formula is from the classic scam playbooks:  If you take the time to listen to or reach the Palm Beach pitch, you’ll find that there is no information about how to claim that elusive $60,000 in Social Security benefits.  It talks about loopholes and Congress screwing things up, but no specific information is provided…..unless, of course, you buy into their program and agree to accept their “free” guide, How to Boost Your Social Security – Before Its Too Late.   Of course, it’s not free.  You’ve got to pay at least $49 to get your “free” guide.

In fact, if you want to learn about preserving your social security benefits you can do it for FREE.   Palm Beach’s marketers are relying heavily upon the analysis done by Prof. Larry Kotlikoff.   He has published his findings and advice, for free, at KPBS’ website, among other places.  He has also co-authored a book, along with Paul Solman, called Get What’s Yours, which you can also buy for about $5 at Amazon.   They contain a number of useful tips about Social Security claim strategies, including the new limits on “claim and suspend” strategies that were fairly common among retirees.   Palm Beach wants to charge you $49 to get what you can essentially get for $5 or less.

The bottom line is that a new tax law creates a six-month window for Social Security claimants to use a “claim and suspend” or “file and suspend” strategy. Claim and suspend is a strategy that permits an individual at or after reaching full retirement age (currently age 66) to claim a Social Security retirement benefit and then immediately suspend the claim. By doing so, a worker allows their own benefit to grow by accruing delayed retirement credits that increases their benefit until age 70 (at the rate of two-third percent per month for each month during which payment was delayed) while enabling a spouse, minor child or a disabled adult child to claim a benefit on the worker’s account. The file and suspend rule was added to Social Security in 2000 as part of the Senior Citizens Freedom to Work Act to help couples plan their retirements. But it did not attract much public attention until a few years ago, when academics and financial planners began to write a flurry of articles about this and other new benefit-enhancing strategies. In the new tax deal negotiated by Congress and the President, this risky strategy has been further complicated. More free info on this is available at Social Security Choices.

In 2014, the same Palm Beach Letter used a different approach to drive unsophisticated investors to the notorious 770 accounts scam.   At that time, Palm Beach asserted that the world’s biggest banks are earning 30-40 times more interest than what they pay to their customers by using these alleged “little known” 770 accounts.   As as result, the banks are “keeping U.S. retirees poor”.     So there’s the target:  retirees who resent banks.    Heck, who doesn’t resent banks?    And they are calling it a “banking conspiracy”……and who doesn’t hate conspiracies?    But if you are in a resentful state of mind, you may want to turn some of that resentment towards the Palm Beach Letter marketers because what they are selling you is life insurance…………very complicated, bad life insurance.

In fact, there’s nothing secret about 770 accounts because they don’t exist.  A ” 770 account” is simply an IRS designation for a tax-free savings account.   Most of us truthfully-included people would call it a “whole life insurance policy” which are those insurance plans that have been largely discredited for decades on the basis that they make insurance companies rich but don’t provide much benefit to the customers.  Whole Life policies often boast a savings component that accrues tax free.  True, life insurance companies might be paying 4.5%-5% dividends but unlike a bank account, the Whole Life Policy obligates you to make large payments every year for life and, by the way, none of these dividends are guaranteed.   But the savings balance, or amount you can pull out, won’t match what you’ve put in, for at least 12-15 years. And that’s not even assuming an investment return on what you put in.

Why are these Palm Beach guys hawking this?   First off,  they are trying to sell you a newsletter that will contain similarly specious advice by which they get generate referral and other kinds of fees.    Also,  insurance salesmen love Whole Life, because there is an unconscionably high commission of as much as 9% over the life of the policy.    The Stock Gumshoe did a thorough and complex analysis of this life insurance swindle.    It is complex because this is a complex investment that might possibly be beneficial for a long-term investor looking to shelter money that might be passed on to heirs but not much else.   But they are notoriously difficult to compare across providers or even understand, which is a hallmark of most commission-driven, hidden fee businesses.

They are closely associated with the notorious Bill Bonner and his stable of scare-mongering investment newsletters.   They publish newsletters and bulletins that litter the Internet:  Agora Financial, Common Sense Publishing, Insiders Strategy Group, Laissez Faire Books, Money Map Press, NewMarket Health, OmniVista Health, Opportunity Travel, Institute for Natural Healing, Oxford Club, Sovereign Society, Stansberry & Associates Investment Research, The Daily Reckoning, Banyan Hill.   These are all variations on investment schemes that promote expensive and risky investment propositions.

But let’s not point all of the blame at the Palm Beach Letter and their infuriatingly exaggerating ilk.   They are casting about for victims who will fall prey to their swindles.   If you are reading this blog, then you are likely not going to fall for their dubious advice.   It is those who aren’t reading this blog who are likely to be making involuntary contributions to financial snake oil salesmen like the Palm Beach Letter.   If you know someone who is looking into this particular financial investment,  or any investment hawked by the Palm Beach Letter, then send them this link.    Better yet,  take them out for coffee and convince them to not let their distrust of banks cloud their more justified distrust of Internet financial fluffers posing as experts.