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As American consumers feel the pinch of a tight economy, many are looking for faster ways to make money and save for retirement. Unfortunately, such a mindset opens the door for investment scams, which are currently on the rise in terms of quantity and variety.
Those who fall prey to investment scams often lose much more than what they would have put into a typical investment. Many are cheated out of their life savings, insurance payments, and even equity out of their homes. To make matters worse, regulators are usually unable to protect the victims after they have been “taken” by the scam. So, in other words, the victims have little recourse or hope to recoup even a small fraction of their loss.
The key to avoid being conned by an investment scam is to educate oneself on the various scams out there and to follow sound investing strategies. The following guidelines can help you with both.
What to Look Out For: You’ve probably received offers in the mail to attend a free lunch or dinner where you can learn more about a potential investment opportunity. Beware, because these free meals may not be “free” at all. Free lunches and free dinners are where many scammers entrap their victims. A smooth-talking host (con artist) puts you at ease with some good food and then promises to protect you from market risk, estate taxes, and probate when you act now and invest today. The host may even claim that he or she has obtained a designation with “senior” in the title, hoping you’ll never know many of these titles are not recognized by industry regulators.
This is not to say that all free lunch or dinner offers are scams. You have to do your homework. Some things to investigate are:
If you’re wondering if the recent free lunch and dinner invitations you received are legitimate or scams, you need to know the top investment frauds to watch out for. Here the five most common ones to know about.
How to Protect Yourself: With so many scams making their way around the globe, you may be wondering how you can ensure that you don’t become the con artists’ next victim. To protect yourself, keep the following strategies in mind:
The Scam Stops Here: Unfortunately, investment scams and con artists will never totally disappear, even with good regulations. Therefore, you need to be a smart consumer and do your “due diligence” prior to making any investment or purchase decision. The more you educate yourself about the various scams and the techniques to keep your money safe, the better decisions you’ll make for yourself and your family’s future.