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Thursday, November 08, 2007

Avoiding investment scams - trust but verify

The Columbian.com article discusses the losses of several victims who lost thought they were putting their savings in the hands of trustful people but ended up losing their savings.

Nancy Meacham lost about $54,000 she had invested with the Greater Ministries International after hearing good word about the ministry from her friends at the church. However, the people at the ministry turned out to be scam artists.

"I learned a tremendous amount - of what not to do," said Meacham, a former public schoolteacher and now a businesswoman who diagnoses and corrects reading disabilities.

"I should have checked out some kind of prospectus to see if they really were doing gold and silver mining," she said. "And I should have checked out their last three years' tax returns."

Similary, another company, Znetix defrauded about 7,200 investors with over $90 million. The company would promise huge returns for investors by investing in its stock, and recruit well-known sports stars including Shaquille O'Neal and Tiger Woods for endorsement deals of its health and fitness services and products.

"The advertising campaign was designed only to sell more stock, as Znetix had no products or services to offer, and little or no revenue."

"I had my doubts about the deal, but their pitch was so smooth and convincing," Franklin said recently. "They managed to scam people with all kinds of backgrounds, including doctors, dentists and lawyers."

As per the article, people can avoid getting scammed by doing things such as the following:

"- By saying no to strangers who phone them, offering impossible profits and using sophisticated persuasive skills.

- By tossing bogus junk-mail offerings in the trash and dealing only with companies you know to be reputable.

- By not clicking on links in unsolicited spam e-mails, links that might duplicate a respected company's logos, but will take folks and their personal information straight to the crooks."

Another good advice is to check out if the person selling investments, or advising on how to invest, is registered with the appropriate state or federal agencies.

"Just not being registered can be a red flag, officials say, and folks who check with an agency such as the DFI also can learn whether any problems have been reported about a company."

Some of the sites that people can use to find out if a person such as a broker selling investments or offering investment advice is registered or not include:

National Association of Securities Dealers Inc.'s BrokerCheck/Financial Industry Regulatory Authority

Securities and Exchange Commission and North American Securities Administrators Association

For complete article, see:

Columbian.com: Investors can learn to dodge scammers

posted by Ruby @ 7:49 AM

2 Comments:

At 10:21 PM, David said…

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At 12:46 AM, Ruby said…

Card Offers:

Have added the link as "Credit Card & Bank".

Thanks
Ruby

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