Posted 1:52 am Sunday, February 03, 2013
Send to Kindle
Educate yourself before investing
By MECHELE AGBAYANI MILLS
Tyler Better Business Bureau
Investments take risk; sometimes a little, sometimes a lot. But smart investors know that the best way to minimize risk is to educate yourself about your basic rights, the protections you are entitled to under the law, and the common scams and frauds to avoid.
Better Business Bureau has teamed with the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation to demonstrate simple steps every investor should take before making any investment decision.
According to the North American Securities Administrators Association (NASAA), state and provincial regulators in the U.S., Canada and Mexico launched more than 2,600 administrative, civil and criminal enforcement actions involving investors.
Investment scam victims are more likely to be college educated males, with higher incomes, who are married and between 55 and 65 years of age. They also tend to have the following in common:
Tyler Better Business Bureau
Investments take risk; sometimes a little, sometimes a lot. But smart investors know that the best way to minimize risk is to educate yourself about your basic rights, the protections you are entitled to under the law, and the common scams and frauds to avoid.
Better Business Bureau has teamed with the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation to demonstrate simple steps every investor should take before making any investment decision.
According to the North American Securities Administrators Association (NASAA), state and provincial regulators in the U.S., Canada and Mexico launched more than 2,600 administrative, civil and criminal enforcement actions involving investors.
Investment scam victims are more likely to be college educated males, with higher incomes, who are married and between 55 and 65 years of age. They also tend to have the following in common:
- They already owned some high-risk investments prior to falling victim to an investment scam.
- They relied on friends, family, or coworkers for investment advice rather than a licensed professional.
- They attended a free lunch or free dinner financial investment seminar.
- They failed to check the background and registration of the professional and/or product.
- They were not able to spot persuasion tactics used by the scam artist.
- Fraudsters are innovative. They prey on economically relevant topics and perpetrate their crimes in a variety of ways. Look for persuasion tactics.
- Phantom Riches: These are promises of huge, very high returns with “no risk.”
- Source Credibility: The salesperson pretends to be credible by stating they are with a reputable firm or have special credentials. Remember people aren’t always who they claim to be.
- Social Consensus: The salesperson wants you to believe that other savvy people have invested, so you should too.
- Scarcity: They create a false sense of urgency by claiming there’s a limited supply.
For more information on protecting yourself from investment fraud, visit www.bbb.org/smartinvesting and www.saveandinvest.org. To report a fraud or scam, please call the BBB Hotline at 903-581-8373.
