ConsumerCents - Keep Your Change: 7/1/2010 Issue

Financial Knowledge is Power

Fraud Prevention Tools

Financial and investment fraud has been increasingly common. In Utah alone, the Division of Securities is investigating fraudulent investment schemes totaling $1.4 Billion that involve 4500 victims.

Becoming a fraud victim often boils down to two things: not researching the person and/or company approaching you about an investment, and not researching the investment product being offered. Failing to do these two important things leaves you vulnerable because you are putting your hard earned dollars into the hands of someone you know little or nothing about. When it comes to protecting yourself from fraud, being an informed and educated consumer is key.

Recently, some of our financial counselors attended a fraud prevention and awareness event hosted by the Fraud College. They brought back some great tips and advice we'd like to share with you.

First, ask questions. It doesn't matter who the person asking you to invest is, ALWAYS ASK QUESTIONS. Get their licensing information, work history, etc. Even if it's a family member, always do your homework. Keep asking questions until you understand the investment and have enough information about the person to fact-check the answers they give. The following are some important things you should know about whoever you give your investment dollars to:

Are you currently licensed in my state? Are you licensed in any other States? How long have you been licensed? Has your license ever been in probation status or revoked?
Have you ever been disciplined by the SEC (Securities & Exchange Commission)?
Do you have references you can provide?
What are the terms of the investment? What are my options if/when I decide to sell?
How often are statements sent to investors? How often are your financials audited? Who performs your financial audits?
What is the name of the company you are with and who are its principles/owners?

Once you have gathered this information, check the answers with the agency in your state that regulates licensing for investors and investment products. Make sure all the information matches what you were told and that the answers abide by all applicable rules and regulations before pursuing the opportunity further. Also check the licensing and complaint history of all persons involved in the company and specific opportunity you are considering.

It's important to note that investing can carry risks; however, just because something is risky does not mean it is fraudulent. How much risk you want to take on is completely up to you. But, there are some claims and statements that are generally red flags and indicate an investment opportunity is not a good one. Beware of these kinds of statements:

The investment is a "secret."
The banks don't want you to know about the opportunity because it's such a money maker.
The opportunity is reserved for only special investors or accredited investors.
The person uses name-dropping to try and persuade you to buy in.
The person bases their credibility on things you have in common: religious affiliation, social groups, professional organizations, etc.
You are pressured to make a decision immediately and discouraged from conducting background research.

Finally, if you ever fall victim to an investment scheme or think you have been asked to participate in something fraudulent, report the incident immediately to your local regulatory agency and the SEC. For more tips on investing wisely and other fraud prevention tips, visit Investor.gov and the FBI's list of Common Fraud Schemes.

Hot Topics & Industry News

ConsumerCents: Building or Rebuilding Credit

At one time or another, many people have to deal with either building or rebuilding their credit, and sometimes it can feel like an impossible undertaking. AAA Fair Credit Foundation is hosting a free financial education workshop on Wednesday, July 21, 2010 at 6 p.m. at our Salt Lake City location on 230 W. 200 S., to teach individuals in our community about types of credit, credit applications, best usage practices and more.

Having good credit has become a necessity in our economy. It determines whether or not you can qualify for a loan, how much you will pay for auto insurance, and sometimes whether or not you will be offered employment. Those who have made past mistakes or are new to using credit can learn proven techniques to get back on track.

Whether you are 18 or 64, or any age in-between, this financial education workshop has something for you. There is always room for improvement and growth and, with something as important as credit, it is never too early to learn best usage practices.

The Building and Rebuilding Credit workshop is free to attend.

Did You Know...

Every so often we have a client share their personal debt elimination or financial achievement story with us. We love to hear from our clients as your stories are an invaluable motivator for us to continue our mission and to demonstrate the value of our services to our communities. If you have a story to share, please write, AAA Fair Credit Foundation, P.O. Box 3808, Salt Lake City, UT 84110-3808 or submit your story online at http://www.faircredit.org/feedback.asp.

The Wishing Well

Client Testimonial

Looking for some quick tips to improve your financial management skills and increase your knowledge as a consumer? Check out our virtual learning modules. All the great topics found at our educational website, ConsumerCents.com are available in condensed on-demand workshops. Each module can be completed in a small amount of time and include interactive quizzes to see how well you remember the information. Take a few minutes and try a couple today! Click Here to visit the workshop list.

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