Avoiding Investment Scams
We would all like to think that we could spot a scam easily. Unfortunately, most of us cannot! Con artists are friendly people. They look professional and appear successful, and they are not always strangers. Some contact us through church groups or ethnic associations. Some are people we know as friends and neighbors. You can lose a lot of money if you fall for an investment scam. How do you avoid having this happen?
We would all like to think that we could spot a scam easily. Unfortunately, most of us cannot! Con artists are friendly people. They look professional and appear successful, and they are not always strangers.
There are some principles to follow:
1. Buy only from licensed or credentialed financial professionals. Stockbrokers and investment advisers must be licensed to sell you stocks, bonds, and mutual funds, for example. Avoid buying investments from persons who are not licensed to sell those products. See the Resources section, below, regarding checking out financial professionals.
2. Review your account statements. Check all statements when you get them and notice the details, including all changes to your investments. Make sure your correspondence is sent to the investment firm's official address. Ask questions right away about anything that seems incorrect, unauthorized, or unclear. If your investment company's broker or advisor refuses to comply promptly when you ask to withdraw money from your account, does not provide proper statements, or does not give satisfactory answers to your questions, complain in writing to authorities. See the Resources section below for information on how to do this.
3. Buy investment products that you have chosen and checked carefully. Stick to buying investment products that you have sought out yourself and investigated carefully. Buy products you can understand, after you have reviewed written details.
4. Make sure you are buying registered investment products. Most legitimate products have to be registered with the SEC and in the state of sale (see the Resources section below). Check them before you buy.
5. Ignore spam email and "hot tips." These types of messages are sometimes meant to trap unwary investors. Hot tips can come from people you know, or be left as "accidental" messages on your answering machine. Fake websites and blogs are sometimes set up to provide false information about investments.
6. Be careful if you are invited to invest by phone, at a meeting, or at a social event. Get details about any investment in writing, and be sure to check them out. Never make a snap decision when you are first approached with an investment idea. If someone pressures you to buy quickly, offers to send a messenger to pick up your money, or claims that the offer is only good "right now" - just say no.
7. If the promoter says it's practically a "sure thing" - don't buy it. All investments carry some level of risk. Don't buy into any product if the salesperson says there is no risk to it, even if you like and trust that person. A salesperson can be the victim of a scam, too.
8. Never make an investment payable to the salesperson. Always make your payment to the investment company.
All investments carry some level of risk. Don't buy into any product if the salesperson says there is no risk to it, even if you like and trust that person. >>
This is taken directly from the BBB Web Site. I get emails all the time where all the person wants is my banking information and I email all of them telling them I am sure their mother is proud of them in their career trying to sam people out of money. With increased contact from so many sources, internet, phone there are more opportunities for people to try to get money from you in a dishonest way, so be careful and protect your money...
Joan