5 Can't-Miss Ways to Spot Financial Fraud
Want to protect yourself? There are five easy ways to protect your mind and wallet from fraud.
In the wake of the Target data scandal, many people have taken a closer look at their personal finances and ways to protect themselves from data scandals and theft. However, falling victim to fraud can be as equally dangerous.
It's easy to be lured into the promises of big returns with no risk, and the surefire prospect of being able to turn $1,000 into $10,000 in just a matter of months is certainly appealing. However, the old saying, "if it sounds too good to be true, it probably is," is one to always keep in mind when considering any potential investment.
The CFTC, which is the government organization working to protect the public from fraud, recently provided helpful guidance to consumers and investors allowing them to protect themselves from falling victim to equally dangerous financial fraud. Thankfully, the CFTC has found five signs that often indicate an individual is a fraudster, and people should be especially cautious when any one of these is proposed when considering a financial or investment decision.
1. A definitive rush
The CFTC began by noting, "investors should be cautious any time they are pressured or rushed into making a decision about an investment opportunity," and fraudsters will attempt to fool people into thinking they are a part of a special opportunity that will sell out fast and must be acted upon quickly. Individuals should always take time to evaluate decisions, and legitimate offers are almost always available for weeks and months.
2. Know there is always risk
Con artists will attempt to draw in individuals with the promise of seemingly unattainable wealth that seems almost effortless. Yet this "phantom riches" bargaining method of sales is something people should always be concerned about, as every investment carries risk.
3. Beware of free favors
Fraudsters will attempt to distract individuals by offering a small favor at no cost in an effort to distract someone from the reality of a bigger fraud down the road. A focus on potential opportunities is more important than seeking to find bargains.
4. Keep an eye on endorsements
The final trend to beware of is a favorite of fraudsters to list friends or family members that may -- or may not -- be aware of the opportunity. Individuals can be drawn into thinking they'll be missing out and will sign their names on the bottom line because everyone else is doing it. Just because others are doing it, doesn't mean you should, and proper care should always be taken to evaluate opportunities on your own.
5. A corner office isn't a sign of credibility
While someone may give off the appearance of being a trustworthy source -- whether it be a beautiful office, fancy clothes, an expert title and degree, or a host of other affiliations -- looks can always be deceiving, especially when it comes to fraudsters. When an investment is being considered, always spend a little time checking out the true qualifications of the person (or persons) on the other side.
There are ultimately many great experts and offers that exist, but there are many more fraudsters who are attempting to swindle money from honest people. So keep these five things in mind when considering any investment decision.
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