Avoiding Investment Scams and Fraud

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Avoiding Investment Scams and Fraud
2004
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Avoiding Investment Scams and Fraud

• How investment scams happen
• How to spot typical investment scams
• How to avoid investment scams
• What to do if youre a victim of an investment
  scam

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How Investment Scams Happen

• Billions of dollars in investments
• Older investors with a
• lifetime of investment
• Con artists who target older investors

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How Investment Scams Happen

• A call, letter, or visit out of the blue
• Guaranteed
• High return
• No risk
• Hurry!!

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Typical Investment Scams

• Actual Investments Gone Bad
• Bad information on risks and benefits
• A bad product for your situation

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Typical Investment Scams

• Actual Investments Gone Bad
• Variable Annuities
• Tax-deferred, long-term investments
• Allow investor to receive payments for life
• NOT a good option for older investors

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Typical Investment Scams

• Actual Investments Gone Bad
• Gift Annuities
• Donation to charity
• Investor receives fixed payments for life
• Good rate of return
• Tax advantages
• Be sure that its a real charity!

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Typical Investment Scams

• Actual Investments Gone Bad
• Viaticals
• Life insurance policies of terminally ill people
• Sold to investors at a discount
• Bewaremany scams afoot

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Typical Investment Scams

• Scams Pretending to be Investments
• Promissory Notes
• Loan to a company
• High rate of return
• Not usually sold to the general public

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Typical Investment Scams

• Scams Pretending to be Investments
• Ponzi Schemes
• Guaranteed high returns
• Get rich quick with no effort
• Heed the warning signs!

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How to Avoid Investment Scams

• Be skeptical of unsolicited calls about
  investments
• Do your homework before investing
• Get written information on the investment product
  and the business
• Verify the information with a trusted financial
  advisor
• Check with securities regulators

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How to Avoid Investment Scams

• Beware the buzz words
• Guarantee
• No Risk
• High Return
• Hurry!

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What To Do If Youre a Victim

• If applicable, complain to your brokers
  supervisor or the firms compliance officer
• File a complaint with state securities regulators
  (see NASAA for a list)
• File a complaint with the Securities and Exchange
  Commission (SEC)
• Contact local law enforcement

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Avoiding Investment Scams and Fraud

• How investment scams happen
• How to spot typical investment scams
• How to avoid investment scams
• What to do if youre a victim of an investment
  scam

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Avoiding Investment Scams and Fraud
2004