No one wants to fall for a scam. Yet, thousands of
people have been scammed over the years. It is
particularly tricky to avoid a scam when there is a
crafty fraudster involved. There are many forms of
financial fraud and scams today and experts say a
lot of caution is required by people if they are to
stand a chance of preventing themselves from
becoming victims.
Being careless will not only amount to the loss of
hard-earned funds or savings, it can also subject
the victim to ridicule. The Washington State
Department of Financial Institutions says, “Many
victims of financial crimes blame themselves for not
seeing through the scam”.
Calling on people to take steps to protect
themselves against scams it says, “No matter what
we call them — con artists, con men, scamsters —
they’re criminals. They steal our money. They’re
not just people next door trying to make a living.
They are trying to deprive us of the money that we
have worked hard to earn and save. They destroy
lives.”
To avoid becoming a victim, the WSDFI says the
following self-defence tips will be helpful.
Don’t be a courtesy victim
Con artists will not hesitate to exploit the good
manners of the potential victim. Remember that a
stranger who calls and asks for your money is to be
regarded with utmost caution and skepticism. You
have absolutely no obligation to stay on the phone
with a stranger who wants your money. It’s not
impolite to say you are not interested and hang up.
Don’t be rushed – check it out
Say no to any salesperson that pressures you to
make an immediate decision. If he or she doesn’t
have the time to explain the investment to your
regular investment professional, or other party, or if
they ask “Can’t you make your own investment
decisions?” Say ‘NO!’You have the right and
responsibility to check out the salesperson, firm,
and the investment opportunity itself. Before you
even consider investing, get the prospectus, review
it carefully, and make sure you understand all the
risks involved. But remember, even written material
sent from the promoter can be fraudulent or
misleading.
Always stay in charge of your money
Don’t be taken in by anyone who wants your money
and assures you that he or she is a professional
and can handle everything. Beware of any financial
professional who suggests putting your money into
something you don’t understand. And never let
yourself be talked into leaving everything in his or
her hands.
Always watch over and protect your nest egg
Never trust anyone who wants you to turn over your
money to them and then sit back and wait for
results. If you understand little about the world of
investments, take the time to educate yourself.
Constant vigilance is a necessary part of being an
investor.
Never judge a person’s integrity by how they look or
sound
Far too many investors who are wiped out by con
artists later explain that the swindler “looked and
sounded so professional.” Successful con artists
sound extremely professional and have the ability to
make even the flimsiest investment deal sound as
safe as putting money in the bank. Remember that
sincerity in a voice, especially on the phone, has no
bearing on the soundness of an investment
opportunity. Always do the necessary homework.
Watch out for salespeople that prey on your fears
Con artists know that many investors, particularly
older investors, worry that they will either outlive
their savings or see all of their financial resources
vanish overnight as the result of a catastrophic
event. It’s quite common for swindlers and abusive
salespeople to pitch their schemes as a way to build
up life savings to the point where such fears are no
longer necessary. Remember that fear and greed
can cloud your good judgment and leave you in a
much worse financial posture.
Exercise particular caution if you have limited or no
experience handling money
Ask a con artist to describe his ideal victim and
you’re likely to hear “elderly widow or widower.”
Many people now in their retirement years have
limited knowledge about handling money. They
often relied on their spouses to handle most or all
money decisions. Those who have received windfall
insurance in the wake of the death of a spouse are
prime targets for con artists. People who are on
their own for the first time in years should always
seek advice of family members or impartial
professionals before deciding what to do with their
money.
Monitor your investments and ask tough questions
Too many investors trust unscrupulous investment
professionals and outright con artists to make
financial decisions for them. They then compound
their error by failing to keep an eye on the progress
of the investment. Insist on regular written reports.
Check the written information. Look for excessive
or unauthorised trading in your funds. Don’t be
swayed by assurances that such practices are
routine or in your best interest. Don’t permit a sense
of friendship or trust to keep you from demanding
this information. If you suspect something is wrong
and you don’t get satisfactory answers, get help.
Look for trouble retrieving your principal or cashing
out profits
If a stockbroker, financial planner, or other
individual stalls you when you want to pull out your
principal or profits, demand to know why. Since
unscrupulous investment promoters have probably
pocketed the funds of their victims, they will go to
great lengths to explain why your savings are not
available.
Don’t let embarrassment or fear keep you from
reporting investment fraud
Investors who fail to report that they’ve been
victimised often hesitate out of embarrassment. Con
artists know all about such sensitivities.
They count on these fears preventing or delaying
the time when the authorities will be notified about
the scam. It’s true that most money lost to
investment fraud is rarely recovered. In many
cases, however, when investors recognised early
that they’d been misled, they were able to recover
some or all of their funds by being a “squeaky
wheel”.
CREDITS: ADEMOLA ALAWIYE
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