Basics Beginner: Understanding and Avoiding Fraud and Scams

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1.
Which of the following descriptions of a work-at-home job is most likely to be that of a scam?
Choose wisely. There is only one correct answer.
An assurance that anyone can do it. Of the choices, this one is the most likely to be from a scam.
2.
Which of the following descriptions of an investment is a telephone scammer most likely to use?
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"Risk-free". Scammers often describe their investments as risk-free.
3.
If you are unsure whether a broker is licensed, you should contact _______.
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Your state securities regulator. Brokers are registered at the state level.
4.
In the world of cryptocurrency, what is a private key?
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A string of secret numbers used to sign transactions. A private key provides access to your cryptocurrency.
5.
Being paid to recruit others to a sales opportunity is sufficient to indicate that the opportunity is actually a pyramid scheme.
Choose wisely. There is only one correct answer.
False. Though it's a part of a pyramid scheme by nature, being paid to recruit others is not by itself an indicator, as even legitimate firms may offer fees for recruitment.
6.
Why might a scammer go to great lengths to detail the intricate aspects of an "opportunity"?
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Detail makes the opportunity look legitimate. The more detail, the more real it seems.
7.
What does a romance scammer usually try to get first, before coming after your money?
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A connection with you. Romance scams require that the victim develop a feeling of connection with the criminal; this makes it harder to refuse him or her.
8.
About how many seniors have been victimized by elder financial fraud?
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One in 5. About one in 5 Americans over 65 have been defrauded financially.