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Home > Blog > Asset Protection > Protecting Yourself Against Investment Scams

Protecting Yourself Against Investment Scams

Investing is a good way to increase your overall wealth by making your money work for you. The right investments can pay off handsomely, but it is important to be cautious when it comes to with whom and where you invest. When it comes to asset protection, you can never be too careful. There are numerous scams aimed at taking advantage of investors, and even those with financial savvy can find themselves the victim of fraud. If you are considering ways in which to invest your money or have been approached by an actual person or company regarding making an investment, it is important to be aware of the types of investment scams that are out there, and how to avoid becoming a scammer’s next victim.

Types of Investment Scams

According to the Federal Bureau of Investigation (FBI), securities fraud involves a variety of illegal activities meant to defraud investors out of their money. As the well-being of our economy depends upon the stability of the stock and investment market, the FBI takes an aggressive role in investigating fraud when it occurs. There are a variety of different types of scams designed to rob investors of their money, and the FBI lists the following among the most common:

  • High Yield Investment Frauds: This type of scam is characterized by promises of high rates of return with little to no risk, and scammers may contact victims by phone, email, or in person offering various types of investments.

  • Ponzi and Pyramid Schemes: In this scam, money is moved between investors, giving the appearance that an investment is solid. The reality is that there is no actual outside investment, and sooner or later investors discover their investment money and supposed gains have disappeared.

  • Advance Fee Schemes: In this scheme, victims are promised high yield investments, but first must submit a fee for the privilege of investing with the company. Scammers keep these fees, and are never heard from again.

People who perpetrate investment fraud are creative, and there seems to be a never ending supply of scams aimed at duping innocent and well-meaning people out of their money. Recent scams have included phony student loan collection services as well as companies offering to help consumers out of foreclosure – for a fee, of course.

Protecting Your Assets

According to the United States Securities and Exchange Commission (SEC), investment scams often take the form of unsolicited offers via phone or email for deals that sound too good to be true. The SEC urges consumers to protect themselves and their assets against securities fraud by following a few simple tips:

  • Ask questions. Investigate any opportunities that come your way, and do plenty of research into the person and the product or service they are asking you to invest in.

  • Be skeptical of unsolicited offers. Never give out personal information, such as credit card or bank account numbers, over the phone or via email until you are sure you are dealing with a reputable company.

  • Beware of foreign or off-shore investments. It can be next to impossible to track money sent abroad if something goes wrong with your investment.

  • Stay up to date. You can find information on current fraud schemes by signing up for Investor Alerts through the SEC.

Let Us Assist You Today

At Cavallo & Cavallo, our experienced New York estate planning and asset protection attorneys provide the legal help you need to ensure your property, interests, and assets are protected. We provide professional, effective legal representation, while offering the comprehensive client service you deserve. With offices in the Bronx and Westchester, we are your neighborhood law firm. If you have questions about an investment or how to manage your assets, call or contact us online today for a free and confidential consultation.

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