PROTECT YOURSELF FROM FRAUD
According to the Federal Trade Commission (www.ftc.org). Americans lose over $1 billion to investment fraud each year. As investors have become more savvy, scams to trick them have consequently become more subtle and innovative. These seemingly legitimate deals can be presented via telephone, mail, advertisements and increasingly through the Internet.
Alabama Securities Commissioner Joe Borg, through the North American Securities Administrators Association (www.nasaa.org). offers these tips to avoid falling victim to investment fraud:
1. Check out the person touting the investment. Alabama law requires most securities and the people selling them to be registered with the state. Before investing, call the Alabama securities Commission at 800-222-1253. Learn about any disciplinary history of the investment’s promoter through the National Association of Securities Dealers at 800-289-9999 or at www.nasdr.com.
2. Beware of high-pressure tactics. Say no to any person who pressures you to make an immediate investment decision.
3. Exercise particular caution if you lack financial experience. Ask lots of questions and insist that the sales person explain the investment until you understand it.
4. Remember that good manners do not indicate personal integrity. Con artists are generally very polite, knowing that most people, especially senior citizens, equate honesty with integrity.
5. Watch out for sales people who prey on your fears. Swindlers commonly pitch their schemes as a way to eliminate your financial fears for the future.
6. Exercise particular caution if you are an older investor. The elderly, particularly older women, are a frequent target of scam artists.
7. Monitor your investments. Insist on regular written reports and look for signs of excessive or unauthorized trading of your account.
8. Look out for trouble when retrieving your principal or cashing out profits. If any person with whom you have invested stalls when you want to withdraw your money, you may have uncovered someone who is cheating you.
9. Report investment fraud immediately, despite any embarrassment or fear you may feel. If you suspect you have been victimized, report it to state regulators at once. The Alabama securities Commission has information on how to report fraud and helpful links on its Web site at www.asc.state.al.us.
10. Beware of reload scams. To recoup their losses, victims sometimes invest in another scheme, or reload, in which the con artist promises to make good the original loss and offer new, higher returns. Often the result is only more losses.
Reprinted with permission from. Mike Peques, Retirement Systems of Alabama.
Copyright Alabama State Nurses’ Association Sep-Nov 2003
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