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Investment Fraud Schemes
Fraudulent investment schemes are often marketed by telephone salespersons armed
with high pressure and sophisticated selling techniques. Some swindlers surround
themselves with the trappings of legitimacy -- rented office space, a
receptionist, investment counselors, and professionally designed color brochures
describing the investment.
Seniors are a prime target for fraudulent investment schemes since many have
saved a good amount of money for their retirement years. Fraudulent schemes
require you to invest your money -- often lots of it. Most promise you either a
large increase in the value of your investment or higher-than-market interest on
your capital, or both.
These schemes are fraught with danger: in most cases, you will never again see
the funds you invested. And you may not even receive the promised interest. If
you do receive interest, you will often be paid late. Often, unbeknownst to you,
your interest will be paid from the investments of others who are newly brought
into the program in order to keep it alive. The swindler hopes these payments
will allay any suspicions you might have as to the strength of your investment.
If answers to any of the following questions are yes, you may be dealing with a
swindler who wants you to put money in to a fraudulent investment:
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Does the salesperson make it sound as you
can't lose?
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Are you promised an unusually high rate of
return or interest payment on your capital?
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Are you pressured to make a decision
immediately or within a short period of time because new investment units
"are selling fast?"
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Does the salesman have any prior successful
experience in the investment area he is promoting?
Protect yourself. Be suspicious of any deal that
promises fantastic return at little risk. Know whom you are dealing with. If you
are not sure, check the company's reputation with your local Better Business
Bureau, Postal Inspector's Office, or District Attorney's Consumer Protection
Unit. Protect your retirement nest egg. If you've been the victim of an
investment fraud where the mail was used, contact your local postmaster or the
nearest Postal Inspector.
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