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Learn about the stock market with these tutorials.
You Will Need
- Computer or telephone
Don't assume a salesperson is legitimate just because they have a fancy title or a corner office with framed certificates; fraudsters hope that if they look successful, you won't bother checking their credentials. Investment professionals -- like brokers, investment advisers, and insurance agents -- must be registered with regulators, such as the Financial Industry Regulatory Authority, the Securities and Exchange Commission, or your state securities or insurance regulator.
Be wary of "phantom riches"
Be wary of an investment pitch that guarantees a certain return or promises spectacular profits -- what fraud-fighters call "phantom riches." No legitimate salesperson can make those kinds of promises. An ethical broker will admit that every investment involves risk.
Ignore the "everyone is doing it" angle
Don't be swayed by a seller's claim that everyone from their mother to their mechanic is in on the deal. A pitch that focuses on who and how many people are invested, rather than why the investment is sound, should be viewed with skepticism.
Refuse to be rushed
Refuse to be rushed into anything. If the salesperson says it's a limited time offer, or that there's a limited supply of whatever's being peddled, consider it a red flag: the seller is attempting to make the investment look valuable by implying it's in scarce supply due to great demand.
Never feel obligated
Never feel obligated to make an investment because the seller gives you something free; salespeople count on those freebies to guilt you into reciprocating.
Arm yourself with information
Further educate yourself about fraud tactics so you can protect yourself and your loved ones. Go to "createthegood.org/fightfraud":http://createthegood.org/fightfraud to download the Outsmart Investment Fraud tool kit and order a free documentary -- because knowing how to recognize investment fraud red flags is the best way to avoid falling victim to them.