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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.
The perpetrators of Ponzi schemes typically pay money to some of the early investors because _______.
Choose wisely. There is only one correct answer.
They want to portray the investment as legitimate
They prefer to act in the best interests of investors
They want the investment to become legitimate as time goes on
They want to portray the investment as legitimate. This is often the perfect way to keep the later investors faithful.
2.
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.
3.
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.
4.
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.
5.
It is possible to actually receive what you were promised in a money transfer scam.
Choose wisely. There is only one correct answer.
True
False
True. Though rare, it can happen, but you are usually being used to cover another person's illegal activity, and you can get in trouble for it.
6.
Why are older people common targets for romance scammers?
Choose wisely. There is only one correct answer.
They don't understand social media.
They are usually single.
They usually have more assets than younger people.
They aren't.
They usually have more assets than younger people. Older people can be prime targets because of their assets.
7.
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.
8.
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.
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