Preventing Investment Fraud

When the stock market is volatile it is a prime time for investment fraud. Con artists lurk everywhere trying to get rich from unsuspecting investors who are looking for ways to recoup their lost savings. They pitch their scams on ways to beat the system and get high returns with virtually no risk, making those who choose to listen believers of their 'too good to be true' claims. Those who have lost their retirement savings or who are trying to build a nest egg could fall victim to these scams unless they use common sense and extreme caution.
To avoid scams, investors should proceed slowly and cautiously before committing to any investment scheme. Check with state regulators to be sure an opportunity is legitimate. Use common sense when you hear of a deal that is too good to be true.

Scams come by way of telephone, internet, mail, in-person, and email.
These crooks are experts in their field and make their living by talking people out of their money. This is their chosen career and they take pleasure in swindling anyone who will be swindled. The telephone and internet makes it very easy for these persons to operate. A well honed telephone message can wear down some of the most difficult marks. A well built web page can make the most dishonest business appear legitimate.
The North American Securities Administrators Association lists the top 10 investment frauds:
Unlicensed individuals selling securities
Deceptive stockbrokers
Analyst research
Corporate promissory notes
Debt notes from prime banks
Illegal viatical settlements
Affinity fraud
Charitable gift annuities
Oil and gas schemes
Leasing scams
Some ways investment fraud is carried out are:
Internet fraud
Abusive sales pitches
Fraudulant investment seminars
Telemarketing fraud
Pyramid schemes
Commodity fraud
Illegal franchises
Fraudulent high tech investments
Entertainment-related investments
Churning
Unauthorized trades
High pressure selling
Illegal accounts
As you can see, investment fraud can come in many different forms. You, the investor, must take responsibility for your choices. You need to be educated in protecting your hard earned money. You need to be aware that there are those who want your money and will try any scheme to get it. You need to practice diligence in choosing your broker, financial advisor, insurance representative, or any other person who will make choices for you and your money.
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