Get Out! 7 Warning Signs of a Scam
If it sounds too good to be true…run.
Getting a decent return is a challenge today. Most investors want rates better than the paltry .5% or less paid on a savings account. But interest rates are expected to stay low through 2013, according to Federal Reserve reports, so what’s a saver to do?
The pain of no gain on bank accounts and Certificates of Deposit is causing some to seek alternative investments, creating a ripe environment for investment scams.
Scams and investment fraud cost consumers about $40 billion a year, notes the North American Securities Administrators Association.
Don’t rush to invest with a new salesperson, and consider asking someone you trust to help review any offer. Also, be sure to ask how the advisor gets paid: by flat fee, commission on the transaction, or both? Do they receive a fee when you purchase or sell, or both?
It’s easy to check out any investment advisor or broker before you give money to invest. Call 877-955-1212 to access an individual or company’s complaint history and registration with the state of Iowa. You can also learn more at www.InvestSmartIowa.gov.
Remember that greater rewards mean greater risks.
And if it sounds too good to be true? It probably is.
Can you spot an investment scam?
- You can get in if you act quickly—the “deal” is only good for you today.
▪ The salesperson can’t answer questions but assures you the investment is “a sure thing.”
▪ There is nothing in writing, no legitimate letterhead, no references.
▪ You are asked for financial information or account numbers.
▪ The salesperson asks you to write your check to him/her.
▪ The firm and the broker dealer (or compliance entity) are the same company.
▪ The salesperson says your friends have profited from this “secret” investment.