Lendrum Law Firm, APC
Financial Fraud and Investment Loss Recovery Attorneys
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How can I avoid falling victim to an investment scam?

Ben Franklin is credited with saying, "An ounce of prevention is worth a pound of cure." Whether he came up with the phrase himself or retooled one that he picked up from another source is something we may never know. That doesn't diminish the value of the adage, however.

That may be especially true when it comes to issues related to investment loss and recovery. Victims of fraud may have avenues of recourse after the fact. It depends on the circumstances of a given case and a proper assessment of all the factors is something to pursue with an experienced attorney. But before falling victim to the schemes of nefarious brokers, there are things individuals should know to exercise a measure of prevention.

The following is offered by the Financial Industry Regulatory Authority, or FINRA.

  • Know who fraudsters go after. FINRA says the prey tends to be Americans nearing retirement. That makes anyone from the baby boom generation a prime target. That also means targets aren't just lonely, gullible seniors. They may just as easily be well-educated, above-average income earners who have suffered some sort of financial setback.
  • Know how fraudsters operate. The process often begins with a conversation during which the sales person probes for personal hot-button issues such as health, family, politics and hobbies. The pitch follows, peppered with comments that push those buttons and capped by pressure lines that suggest you would be a fool to refuse the deal.
  • Know how to react. If you get a pitch call, don't hesitate to end the conversation by just saying no. Alternatively, you can press the caller to provide proof of legitimacy. Get information regarding their FINRA or Securities and Exchange Commission registrations. Ask if they're registered with state regulators and, if so, which ones. Then confirm what they say with the proper agencies.

It is easy to spout the old advice that if something sounds too good to be true, it probably is and should be avoided. That fails to consider that those who ply financial fraud know how to make an offer sound just true enough. That being the case, caution is perhaps the best policy.

Source: FINRA.org,"Fighting Fraud 101," accessed July 30, 2014

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