I don’t know about you, but as I have gotten older, I would like to think I have gotten smarter. That thought could be the first step to becoming a victim of investment fraud.
It is easy to assume that you are too savvy to fall for a scam. However, you may be surprised to learn the demographic for investment fraud:
- Males, ages 55 to 65
- Self-reliant when it comes to making decisions
- Above-average financial knowledge
- Above-average income
- College educated
- Experienced a recent health or financial setback
- Open to listening to new ideas or sales pitches
These are traits that are generally embraced, as they should be. Don’t let your strengths become your vulnerability. Over the past few years many people have experienced financial setbacks, often due to circumstances outside their control. In an effort to “catch up,” we might be willing to take investment risks that could further weaken our portfolio.
There are all types of investment scams: pyramid schemes, Ponzi schemes, pump and dump, advance fee fraud and offshore scams.
Scammers will generally take the time to develop a relationship with their victims. They will use your emotions to break down barriers.
Avoid becoming a victim of investment fraud by doing your research:
Be sure they are licensed.
Check out the investment to see if it is registered and with what agency.
Don’t be pressured into making a quick decision.
If it sounds to good to be true, run — don’t walk — away.
The Better Business Bureau provides consumer education on outsmarting investment fraud.
For more information or to arrange a presentation to your group or organization, contact me at (254) 449-1567 or firstname.lastname@example.org.
Helen Moore is the regional director of the BBB serving Central, Coastal, Southwest Texas and the Permian Basin.