The Latest Scams Circulating the Consumer World. Be warned. Be informed.
November 2006
Investment Scams
Did you know that you can be smart about money but still be susceptible to scams? If you have been reading the Fraud of the Month for awhile now, you know the scams that are out there and why to avoid them. Read on to see if someone you know fits the profile of a financially-literate adult that may fall for an investment scam.
Investment Scams are one of the most common schemes that victimize older consumers.
A recent study by Doug Shadel, state director of AARP Washington and Anthony Pratkanis of the Consumer Fraud Research Group finds that knowing about finances doesn't necessarily make you invulnerable to scams. Investment-fraud victims -- people who lost $1,000 or more to investment scams - - are significantly more financially literate than people who have never been victims.
Shadel and the research team wanted to answer the question Why do some people fall for investment fraud scams while others do not? They found that an investment-fraud victim is most likely to be a married man that:
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Lives with one or more person
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Has at least a college degree
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Earns more than $30,000 a year
Compared with people who didn’t fall for an investment scam, victims are more likely to:
If you know someone, who fits this profile, share the information with him.
Play It Safe
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Be skeptical and do your homework before you invest.
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Make sure you understand the risks associated with the investment.
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Read the prospectus and seek more advice to get another perspective on the investment.
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