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Avoiding Investment Fraud

Each year, Americans Lose an Estimated $40 Billion to Investment Fraud

How do you know if an investment opportunity and the person offering it are legitimate? It can be difficult to spot con artists since they don’t always look like the stereotypical image. Often, they are well-dressed, well-spoken and work hard to gain your trust. They know if they look like a fraudster, you probably won’t invest your money with them.

A familiar Face

Unfortunately, they might even be someone you know. It’s becoming increasingly common for fraudsters to defraud people within their own community. Affinity fraud occurs when someone you know and trust takes advantage of you, not a stranger. These unlikely fraudsters could be a neighbor, friend, someone you know through church or even a family member. Avoid investing with someone solely because they have a good reputation, or you think you can trust them. Always take time to fully research the opportunity and make sure it’s legitimate.

Online Risk

You should also use caution when investing over the Internet. It’s easy to have a false sense of security online, but the Internet remains largely unregulated and completely anonymous. Anyone can create a website and appear to be a qualified professional. Take the same precautions as you would with other investment opportunities and try to meet in person if possible. Most importantly, never give out your personal information online unless you are sure the company and/or individual is legitimate.

Additional tips for avoiding investment fraud:

  • Hang up on unsolicited phone calls.
  • Get written information. Every investment should have a circular or prospectus that outlines the details of the investment.
  • Never invest based solely on reputation or word of mouth.
  • Ask questions. If the person hesitates to give you answers or changes their response, walk away.
  • Call the Indiana Securities Division at 1-800-223-8791 or search the database on the Securities Portal to verify licensing and registration of the investment and the person selling it.
  • If you believe you’ve been the victim of investment fraud, call 1-800-223-8791 or file a complaint online.