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Basics Beginner:
Understanding and Avoiding Fraud and Scams
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
About how many seniors have been victimized by elder financial fraud?
Choose wisely. There is only one correct answer.
One in 5
One in 10
One in 20
About one in 100
One in 5. About one in 5 Americans over 60 have been defrauded financially.
2.
If you are unsure whether a broker is licensed, you should contact _______.
Choose wisely. There is only one correct answer.
Your state securities regulator
The FBI
The federal government
Any of the above
Your state securities regulator. Brokers are registered at the state level.
3.
Which of the following job offers is most likely a work-at-home scam?
Choose wisely. There is only one correct answer.
Sewing purses at home for $10 apiece
Processing rebates for two hours a day for $500
Typing reports at 1 cent per word
A work-at-home job that requires a bachelor's degree
Processing rebates for two hours a day for $500. Pay that is far above market rates is a classic sign of a scam.
4.
Romance scammers try to prey on our _______.
Choose wisely. There is only one correct answer.
Compassion
Empathy
Need for connection
Any of the above
Any of the above. A romance scammer takes advantage of our basic human goodness in order to take money from us.
5.
In the world of cryptocurrency, what is a private key?
Choose wisely. There is only one correct answer.
A password
A string of secret numbers used to sign transactions
A secret word that a scammer sends you
None of the above
A string of secret numbers used to sign transactions. A private key provides access to your cryptocurrency.
6.
Which of the following descriptions of an investment is a telephone scammer most likely to use?
Choose wisely. There is only one correct answer.
"Risk-free"
"Earnings comparable to those of the market"
"The investment is available not just to you, but to anyone"
"Our address is ..."
"Risk-free". Scammers often describe their investments as risk-free.
7.
Why are pyramid schemes unsustainable by nature?
Choose wisely. There is only one correct answer.
There are never enough participants to keep the pyramids growing
Membership fees are too low
They pay too much in dividends to their members
They're not unsustainable; they can last a very long time, in fact
There are never enough participants to keep the pyramids growing. They are a fast way for scammers to defraud others.
8.
Why might a money-transfer opportunity require that you sign a non-disclosure agreement?
Choose wisely. There is only one correct answer.
It is standard operating procedure when transferring money
To prevent you from discussing the deal with other people
For income tax purposes
The government requires non-disclosure agreements when you transfer money
To prevent you from discussing the deal with other people. This is a common tactic in investment fraud.
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