Dedicated to Keeping You Informed of Internet Viruses and Scams


Investment Fraud:

Know the Signs

Deceptive pitches for investments often misrepresent or leave out facts in order to promote fantastic profits with little risk. No investment is risk-free and a high rate of return means greater risk. Before investing, get written information such as a prospectus or annual report. Beware if a salesperson:

  • Encourages you to borrow money or cash in retirement funds to invest;
  • Pressures you to invest immediately;
  • Promises quick profits;
  • Says that the disclosure documents required by Federal law are just a formality;
  • Tells you to write false information on your account form;
  • Sends material with typos or misspellings or not printed on letterhead;
  • Does not send your money promptly;
  • Offers to share inside information; or
  • Uses words like "guarantee","high return","limited offer", or "as safe as a CD".
  • Uses the phrase, "this investment is IRA-approved."
  • Claims that "off-shore investments are tax-free and confidential."

Affinity Fraud

Affinity frauds are investment scams that target specific groups, such as the elderly, religious or ethnic communities. The investment promoters involved in these scams often are (or pretend to be) members of the group.

Affinity fraud usually involves either a fake investment or an investment where the scammer lies about the investment’s risk of loss, earnings or historical performance. Many affinity frauds are Ponzi or pyramid schemes.

Take these steps to avoid being a victim of affinity fraud:

  • Research the investment promoter’s professional background (even if you know him or her), as well as the investment itself. Use independent information, not just brochures provided by the promoter.
  • Check to see if this person is licensed and verify with the Securities and Exchange Commission and your state’s securities regulator.
  • Don’t make an investment based solely on the recommendation of a member of an organization or group to which you belong.
  • Beware of promises of spectacular profits or “guaranteed” returns, with little risk.
  • Be skeptical if the details of the investment opportunity are not in writing.
  • Don’t be pressured or rushed into buying an investment.

Contact the SEC or your state’s securities administrator if you have questions about investments or to file a complaint about investment fraud.

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