How To Protect Yourself From Investment Scams

There are many ingenious and crafty ways in which scam artists attempt to defraud investors but the basic golden rule (so to speak) for any potential investor is – if the deal seems too good to be true, it probably is.

Sometimes, however, tuning in to your internal compass is difficult especially when a bogus product from a scheming individual is packaged with a familiar look and feel. At Rapid Realty we advocate for our clients, and work with our clients to give them the broadest understanding of everything involved.

Recently, there has been a rise in fraudulent promissory notes and/or private bonds as methods to fool investors out of hundreds of millions of dollars. If you have an offer of buy, rent or lease a U.S. Treasury security for a specific period of time, it is mostly likely a bogus offer. Here are some ways the U.S. Treasury recommends to verify the authenticity of offered securities, and how to protect yourself:

  • Be especially wary of securities offered for purchase or offered as proof of financial stability that bear the CUSIP number of 912810BU1.

  • Demand that the offeror produce the securities or evidence of ownership. If they can not,  you should not consider the offer genuine.

  • Demand a statement from the financial institution holding book-entry securities which are investments like stocks and bonds whose possession of is documented electronically. These type of securities dispose of the paper version of COIs (certificate of ownership) and are never physically transferred when bought or sold. The transaction is recorded as an accounting entry where the investors maintain accounts.

  • Question the validity of any securities and information furnished to you with a trusted and informed source, such as your broker, accountant, or lawyer.

  • Confirm that the certifying or holding organization is legitimate, still in business and how long it has been in business. Call the organization for specifics on the purported existence of the securities.

  • Ask if the person offering the investment is registered with the SEC or with the securities agency in the state or country where you live. If filed by a U.S. company, the statements are available on the EDGAR database at http://www.sec.gov. However, not all securities are required to register with the SEC (Securities and Exchange Commission). Some of the exemptions are private offers with a specific number of individuals or institutions and intrastate offers. Do your due diligence to validate the offer from every angle.

  • Do not assume that people or organizations are who they say they are.
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