How to Resist Fraud

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How to Resist Fraud

Frauds are all around us, and they evolve with the times. However, when it comes to protecting yourself, there are some actions that can help you resist them.

Investment fraud

People who sell investments must be licensed by their state securities regulator. Contact your state securities regulator to find out whether a salesperson—and the investment being sold to you—is actually registered. If you already have a broker, read your statements carefully for any unauthorized trades, unexplained fees, or anything suspicious. Also, find out where the investment is trading and verify any claims made about it.

Pyramid schemes and work-at-home scams

If you suspect one of these, research the company online to see if there are any warnings about it: type the company’s name into a search engine along with the word complaints. Check with the Better Business Bureau (www.bbb.org). And check with the Federal Trade Commission here.

Tips for all suspicious opportunities

• Always be skeptical of any investment claiming a high yield and/or low risk.
• Beware if the promoters are claiming that the investment is secret or confidential or limited to only a few people. Secrecy and exclusivity are common tipoffs to scams.
• Beware if the opportunity is vague about how it works or who is involved.
• Verify the opportunity by researching it as well as you can. Consult a broker or an investment advisor or an attorney if you can.
• For charity calls, find out what percentage of the earnings goes to actually helping people.
• Don’t buy from unfamiliar companies.
• Request that written material on the offer be mailed to you.
• Insist on investigating the company and the offer through the Better Business Bureau, the National Consumers League (www.fraud.org/), or other watchdog groups.
• Get the salesperson’s name, phone number, address, and business license number, and then verify all these.
• Don’t pay in advance for any services if offered by cold-callers.
• Don’t let the salesperson send a courier to your home to pick up payment.
• Never give out your credit card numbers, Social Security number, bank account numbers, date of birth, or card expiration dates to unknown callers.
• Resist any pressure to act quickly or make decisions right now.
• Don’t wire money based on a request made over the phone … especially overseas.
• Don’t sign blank insurance claim forms.
• If the business does not have a street address, or if the finder is never available, be wary.
• Be cautious with non-disclosure agreements that are added to money-transfer contracts. These are designed to prevent you from discussing the deal with other people.
• Do not agree to transfer money on behalf of someone else.
• Finally, if you’re on the phone, feel free to just hang up!