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Indiana Securities Division

Securities Division > Indiana MoneyWise > News You Can Use > Money Clip Tips - Investment Fraud Straight Talk Money Clip Tips - Investment Fraud Straight Talk

Originally published November 2012

It is estimated that Americans lose $40 billion to investment fraud each year.  NASD Investor Education Foundation sponsored a study to determine who is likely to become a victim of investment fraud.  The study showed the new face of investment fraud victims to be self-reliant when it comes to making decisions, optimistic, have above average financial knowledge, have above average income, college educated, may have recently experienced a health or financial setback and are open to listening to new ideas or sales pitches-Not the isolated, frail, gullible person that might come to mind.  How is this possible?  Fraudsters are masters of persuasion; they tailor their pitches to match the physiological profiles of their targets.  They ask questions about family, friends, hobbies, education, political views, etc to find their targets weakness and when they do, they overload their target in a way that could throw anyone off their game.  No one wants to become a victim of investment fraud, but without the right knowledge it could happen to anyone.  Follow these easy tips to lower the chance of becoming a victim of investment fraud. 


·        Never trust someone simply from reputation or word-of-mouth.  Recommendations are a great resource but should not be the only stop; always research an opportunity fully. 

·        Ask questions.  A broker should be able to answer questions or find an answer quickly and willingly if he/she does not know the answer.

·        Get written information like a prospectus that details the investment opportunity. 

·        Meet the broker in person and get to know their investing style. 

·        Guard personal information; don’t give information out over the internet or over the phone without verifying the company and/or individual first. 

·        Hang up on unsolicited calls.   

·        Always remember to investigate before investing.  To ensure an agent is licensed and that an opportunity is registered, check with the Securities Division of the Office of the Indiana Secretary of State by calling 1.800.223.8791 or by using the online searchable database at 


Fraudsters want the hard earned money of others and will do almost anything to get it.  This means anyone could potentially become the target of investment fraud.  The best protection from investment fraud is investor education.  Outsmart fraudsters by remembering to investigate before investing by contacting the Securities Division of the Office of the Indiana Secretary of State.  Visit to use the online searchable database or call 1.800.223.8791 to ensure the agent and opportunity are licensed and registered.


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