The 76-year-old woman planned to use $300,000 she inherited from her father's estate to buy a home under construction on O'ahu but almost lost her money after investing in something she didn't understand.

Securities commissioner Tung Chan, of the state Department of Commerce and Consumer Affairs, describes the case of "Mrs. Tanaka" to warn others. The story is true but the woman has asked to have her real name held back because she doesn't want her children to find out what she did.

Senior citizens often fall victim to financial scams. "There's a real high shame factor when they get ripped off," Chan said. And seniors often fear that their children will take away their independence if they confess that they've been financially foolish.

"The kids may take away their bank accounts," she said.

"Mrs. Tanaka," who is originally from Japan, told investigators she was looking for a safe investment when she saw an advertisement in a newspaper for a high-rated, federally insured certificate of deposit. Rather than investing in a CD, the company talked her into buying something known as "viatical settlement contracts."

Company officials assured her the investment was guaranteed and could be delivered to her at a specific date but she didn't understand the investment or know that type of contract is risky and often locks in your money for a while.

In the "Mrs. Tanaka" case, the victim called state offices when she found she couldn't get her money right away.

Chan said they found the investment company wasn't registered with the state's securities branch. "Eventually, we were able to get her funds back and fine the company," she said. "The company is no longer doing business in Hawai'i."

She cautions investors to gauge their tolerance for downturns and less-than-rosy outcomes that usually accompany the potential for big gains."Investment always has some kind of risk," she said.

Chan also warns consumers about free lunch seminars where they face high-pressure sales tactics. Some who have been pushed into these investments regret it for the rest of their lives, she said.

And she warns about "affinity fraud" when people use affiliations to make you trust them: "We're in the same church or in the same club," which may encourage people to let down their guard.

"Understand your investments before you buy them," Chan said. She said the financial fair next week can help educate people and help avoid scams and common mistakes.

April is financial literacy month. Chan said the information includes college savings program, unclaimed bank accounts and a variety of helpful handouts.

The "Mrs. Tanaka" story ended happily: She got her money back and is now living in her own house. But Chan's office warns that's not always the case.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.