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| | Fraud Tips
Ignore These Warning Signs at Your Peril!
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FRAUD TIP 1: Always try to know the person you are dealing with. Obtain as much information as you can before you do business with her. Reputable promoters will
have decades of experience you can check out. |
| FRAUD TIP 2: Check all licensed individuals who are promoting the transaction. Most states have web sites you can use to verify licenses. You may have to call
to determine if the person has any negative professional history. |
| FRAUD TIP 3: Does the transaction make sense? If it is too good to be true it is probably not true. Don't fall into the trap of thinking that you have discovered a
secret method of how the rich get richer. There is not much new in money transactions. |
| FRAUD TIP 4: Is the rate of return commensurate with the risk? If not it is probably a fraud. The market for money is very efficient. Low risk means low
returns. High risk offers high returns. If you are offered high returns with low risk, the transaction is probably being misrepresented. |
| FRAUD TIP 5: If you find a discrepancy in the presentation that shows either an intent to mislead or a lack of professional background, do not get involved. You are
fortunate to find one example of this sort in a well-run con game. |
| FRAUD TIP 6: Fraud promoters are very good and very likable or nobody would be fooled. The fact that you like the promoter is often a warning sign. Good fraud
promoters work overtime to make their victims like them. |
| FRAUD TIP 7: If there is a prospectus and it says that you can lose all your money, believe it. The lawyers have put that risk factor there over the objection
of the company because it is true. If a promoter says something different, pass on the investment. |
| FRAUD TIP 8: Check out the professionals (accountants, consultants and lawyers). How knowledgeable, experienced and reputable are they. Large firms are not a
guarantee of quality (think Enron). |
| FRAUD TIP 9: Check your emotional state: are you overly excited about the investment or are thinking that you are getting a very good deal? Often fraud victims are
blinded by the excitement created by the promoter. Good investments are often more about proper research that how one feels. Buy an automobile by how you feel but not a stock. |
| FRAUD TIP 10: If you ignore these tips you are
gambling. If you are gambling with the investment, admit it to yourself. If you are defrauded after ignoring these tips, don't forget to take some of the blame yourself. However you still
have legal rights to recover your loss. |
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