Five Fraud Tactics To Watch Out For In 2011 (NAPSA)—While reviewing investment statements during tax time, many Americans feel they could’ve done better. Reassessing goals and tweaking your portfolio is fine, but hunting for huge returns could make you vulnera- ble to scam artists skilled in making “too good to be true” sound good enoughtobereal. The stories cons use to steal investors’ money are always changing, but research by the FINRA Investor Education Foundation and AARPhasrevealed five common red flags present in nearly every scam. Fraud experts funded by the FINRA Foundation analyzed hun- dreds of hours of undercover audio tape from law enforcement agen- cies. “Those tapes gave us incredi- bly powerful insights that helped us create a course and a documentary that teaches investors how to spot these red flags and protect themselves,” said FINRA Founda- tion president John Gannon. One important discovery was that investment fraud victims tend to be well-educated, financially literate, higher-income people nearing retirement. The fraudsters typically begin by getting to know their marks, asking benign questions about health, family, values, hobbies and Investment fraud victims tend to be well-educated,financially liter- ate, higher-income people nearing retirement—but a few tips can help you save your money. @) spot these tactics, they can main- tain control. The five most common investment fraudtactics are: Phantom riches. The con promises oversized returns couched in terms of something you've always wanted. Source credibility. Fraud- sters often claim to be reputable authorities or experts or to have special credentials to gain victims’ trust. Unfortunately, credibility can easily be faked. Social consensus. When a con says other savvy investors just like you are investing, he is using social consensus. Sometimes acon will recruit leaders of a community to do the selling for him or to provide additional credibility. Reciprocity. Cons will offer to do a small favor or give a small gift, then pressure victims to reciprocate by investing. Scarcity. This is often used as a closing tactic by claiming “a limited supply” and creating a false sense of urgency. Examples of these tactics, and other information about avoiding political and religious views. fraud, are featured in the Founda- tactics,” Gannon said. “The goal the Trade: Outsmarting Investment Fraud,” which is airing on public television stations nation- toward the emotional. It’s what will air or to order a free copy of the DVD, visit the Foundation’s the ether.” AndInvest.org. You can also learn “Once they know which buttons to push, they'll bombard you with these common persuasion is to push your decision making away from the rational and con artists call ‘putting you under If, however, investors learn to tion’s free documentary, “Trick$ of wide. To see when and whereit fraud-fighting website, www.Save more at (888) 295-7422.
