This is a guest post from Bryan Sayers. Mr. Sayers is with Forex Fraud, a site dedicated to introducing people to Forex, and keeping them from falling victim to Forex scams.
One of the most difficult things to do, especially during these tough economic times, is to save your savings, AFTER you have saved them. It is not enough to get your household budget in order and to set aside 10% of every paycheck in a savings plan. The real psychological difficulty begins after you amass a nice little mound of cash. Televised commercials, Internet ads and salesmen galore will tempt you like never before to buy or invest in their respective wares.
Yes, the sirens of temptation will beckon, but only you can protect your plan for financial security. You should be taking a class on how to manage your investments, but perhaps, a quick update on the pitfalls that might come your way is the best advice for the moment. Marketing and investment scams are very real, some even legitimate, but awareness is the first step toward prevention for all of these.
The simple ones are the advertising approaches you see every day. You have spurned these offers before, so just repeat your iron will when confronted by:
  • Ads that suggest you buy a new car every year;
  • Salesmen who refuse to negotiate on significant purchases;
  • Salesmen who resist your attempt to comparison shop;
  • Ads for brand names unless the quality is worth the price;
  • Any ad that says you must have the latest electronic anything.
Investment scams are a bit more devious in their design. You must me more than skeptical to avoid these. Whether in stocks, bonds, commodities or forex investment, each of these schemes will be tailored to fit your investment vehicle of choice:
  • High Yield Investment Program: The blinking Internet ads promise outrageous returns with little risk to draw in consumers whose greed exceeds their caution. High leverage or margin, the ability to borrow from the broker, also promises high returns, but it increases the ability of the unscrupulous broker to steal your money through manipulation. As always, if it sounds too good to be true, it probably is;
  • Unsolicited Approaches: Beware of emails, phone calls, or mailers providing tips or investment opportunities. “Ponzi” and “Pump-and-Dump” schemes are prevalent in this category. Crooks have access to mailing lists and understand how to ply their trade in cyberspace. Be very careful, ask questions about how they got your name, determine where and who they are, and never give your personal identity information out freely;
  • High Pressure Sales Efforts: All kinds of sales tactics are employed to sell brokerage services, offshore forex schemes, software solutions, trading strategies, automated robot traders, and nearly anything that has “invest” in its name. Anything offshore is a warning sign. Trying to press your legal rights in a foreign jurisdiction is a case in futility. Products that claim to have the “secret” deserve your skepticism. If the salesman demands urgency when it comes to payment options, hold onto your wallet or checkbook and walk the other way!
Although most people never expect to be defrauded, crooks have a unique way of finding people that have ample savings, just received large sums of money or believe in getting rich with very little effort on their part. Department of Justice studies also confirm that people with a college degree or just some college are the most susceptible when it comes to the con artist and his tricks.
Awareness is the first step in stopping legitimate and illegitimate fraud in its tracks. Most scams focus on the “sell.” Healthy skepticism is a must. Be alert, be cautious, and be smart!