Setting Financial Goals
  Financial Professionals
 
E-MAIL THIS PAGE PRINT THIS PAGE
 

You've heard it many times before: If it sounds too good to be true, it probably is. Yet every year, many intelligent, honest people lose money to scam artists and illegal schemes. The question becomes, "How do you avoid being a victim of one of these schemes?"

No protection is foolproof, but several financial agencies have put together information and advice to help you spot fraud and illegal schemes. They want to help you protect your hard-earned assets. Some of the agencies also provide instructions on how to file a complaint. CFP Board has provided the resources below so you can be better prepared to know if a deal is too good to be true.

AARP

AARP is a nonprofit membership organization of persons 50 and older dedicated to addressing their needs and interests. The AARP Web site offers information on a broad range of topics, including AARP's public policies, answers to financial planning questions, guidance on health and wellness, and tips for coping with difficult life transitions.
> Web site - http://www.aarp.org

AARP Consumer News (October 2008):
When “Free” Isn’t Free
As sure as night follows day, scamsters are quick to latch on to recent developments in the financial markets as an opportunity separate you from your money. Don’t be surprised if you find more invitations to “free lunch” seminars on investment or business opportunities waiting in your mail box than you had previously. All too often, these financial seminars are designed to sell you a product or to get you to open a new account. AARP tells you how to avoid getting heartburn at these events at: http://www.aarp.org/money/consumer/articles/free_lunch_invitation.html

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)

FDIC's Web site provides practical guidance on how to become a smarter, safer user of financial services. The Web site offers helpful hints, quick tips and common-sense strategies to protect and stretch your hard-earned dollars.
> Web site - www.fdic.gov/consumers/consumer/news/

FDIC Consumer News (Summer 2008):
If Your Home Equity Line Has Been “Frozen”
Homeowners have long used home equity lines of credit as a way to borrow against their home’s value to pay for major expenses such as college tuition, home improvements or medical bills. But with home values dropping, the collateral securing these lines of credit is worth significantly less. Many lenders are responding by reducing the amount that can be borrowed or by suspending access to these loans entirely, even for people who have been making their loan payments on time. While reducing or freezing credit lines may be a prudent response for lenders managing their risks, consumers who use home equity lines to pay for major purchases or to pay off higher-priced credit, can be faced with a significant financial hardship by having their source of funding reduced. The Federal Deposit Insurance Corp. has issued a bulletin for homeowners who have had their home equity line reduced or frozen. Read more at: http://www.fdic.gov/consumers/consumer/news/cnsum08/summer_08_color.pdf

FEDERAL RESERVE BOARD

On the Federal Reserve Board Web site you will find publications with advice on how to file a complaint about a bank, as well as tips on other consumer topics.
> Web site - www.federalreserve.gov/consumers.htm

Federal Reserve Update (November 2008):
The Fed Warns of Loan Scams
The Federal Reserve Board is alerting the public to instances of questionable solicitations directed at consumers. These solicitations promise consumers access to personal loans through a nonexistent Federal Reserve lending program. Under this fraudulent scheme, targeted individuals are told that that they can work through a broker to access a Federal Reserve program that extends sizable secured loans to consumers. Consumers are encouraged to deposit large sums of money into a bank account, under the guise of a security deposit, in order to receive the purported loan. The Federal Reserve is advising consumers that it has no involvement in these solicitations and does not directly sponsor consumer lending programs. The matter has been referred to the appropriate authorities for action. Consumers with questions about solicitations that they suspect may be fraudulent are encouraged to contact the Federal Reserve Board Consumer Help Center at http://www.federalreserveconsumerhelp.gov or by calling 1-888-851-1920.

FEDERAL TRADE COMMISSION (FTC)

On the FTC Web site you will find publications with advice on avoiding scams and rip-offs.
> Web site - www.ftc.gov/bcp/consumer.shtm

FTC Update (November 2008):
FTC Warns Consumers about Potential Charity Scams
The economic turmoil is benefiting at least one group: Identity thieves are tapping into news about bank failures and other mayhem to prey on potential victims. But a new federal regulation that requires a broad array of companies to better protect consumers' data aims to reduce the prevalence of this white-collar crime. Under the so-called "red flag" rule, the Federal Trade Commission, federal bank regulatory agencies and the National Credit Union Administration require just about any company that extends credit to consumers to have identity theft prevention programs in place. The new rule requires companies enact measures to "identify, detect, and respond" to activities that signal identity theft, according to the FTC announcement which can be found at: http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm

FINANCIAL INDUSTRTY REGULATORY AUTHORITY (FINRA)

Knowledge is the best defense against investment fraud. Reading FINRA's (formerly NASD) investor alerts will give you the information you need to protect your money and avoid scams and other investing problems.
> Web site - www.finra.org/InvestorInformation/InvestorAlerts/index.htm

FINRA Update (September 2008):
What Happens If your Brokerage Firm Closes Its Doors
Given the turbulence affecting the financial services industry these days—including recent announcements concerning Lehman Brothers—you may be wondering what would happen to your securities account if your brokerage firm closed its doors. In virtually all cases, when a brokerage firm ceases to operate, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm. The Financial Industry Regulatory Authority (FINRA) has published an alert to help investors understand the protections provided under federal securities laws to safeguard investor assets at: http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/P116996

Identity Theft Resource Center (ITRC)

Identity Theft Resource Center® (ITRC) is a nonprofit, nationally respected organization dedicated to the understanding and prevention of identity theft. The ITRC provides consumer and victim support as well as public education. The ITRC also advises governmental agencies, legislators, law enforcement, and businesses about the evolving and growing problem of identity theft.
> Web site - http://www.idtheftcenter.org/index.html

ITRC Prevention Tips (October 2008):
Signs Your Personal Information Has Been Compromised
The Identity Theft Resource Center (ITRC) reports 449 reports of data breaches in the first eight months of 2008, topping the full year list of 446 in 2007. As a result, the ITRC estimates that more than 30 million people will receive a breach letter this year. Though unnerving, a breach letter does not mean you are a victim of identity theft. A breach letter is just that—a notice that some data has been lost or stolen. To learn more about data breaches, and how to tell if your personal information has been compromised, visit the ITRC web site at: http://www.idtheftcenter.org/artman2/publish/m_press/Breach_Letter_Blues.shtm

NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC)

The NAIC Web site provides consumers the latest alerts about insurance products and services including, "Tips for Buying Life Insurance," and "Protect Yourself: How to Avoid Deceptive Sales Practices." The Web site also allows you to file a complaint with the Consumer Information Source.
> Web site - www.naic.org/consumer_home.htm

NAIC Consumer Alert (August 2008):
INSURANCE FRAUD: What Is It and How Do I Report It?
Each year, insurance fraud costs companies and consumers alike tens of billions of dollars. In order to better identify and reduce incidents of insurance fraud — and, most important, protect consumers — the National Association of Insurance Commissioners prepared the following tips for identifying and responding to insurance fraud.
www.naic.org/documents/consumer_alert_auto_insurance.htm

NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION (NASAA)

NASAA's Web site offers investors a wealth of resources to help them protect their savings. Some of the articles include "Top 10 Scams, Schemes and Scandals" and "How to Spot a Con Artist."
> Web site - www.nasaa.org/Investor Education/NASAA Fraud Center/ or www.nasaa.org/Investor_Education/Investor_Alerts___Tips/

NASAA Investor Alert:
Traps Likely to Burn Investors
The North American Securities Administrators Association warns that scamsters are using every trick under the sun to separate unsuspecting investors from their hard-earned dollars. State and provincial securities regulators caution investors to screen themselves from hot energy-related tips, speculative real estate promotions, unsolicited invitations from new online “friends,” and complex, opaque investment products that fail to offer clear disclosures of their risks and costs. Don't get burned, learn more about the latest scams at:
www.nasaa.org/NASAA_Newsroom/Current_NASAA_Headlines/8941.cfm

U.S. SECURITIES AND EXCHANGE COMMISSION (SEC)

The SEC Web site provides articles for investors on how to avoid fraud, including "Internet Fraud: How to Avoid Internet Investment Scams," "Guide to Identifying and Avoiding Securities Fraud," "Stock Market Fraud 'Survivor' Checklist" and many more.
> Web site - www.sec.gov/investor/pubs_subject.shtml#fraud

SEC Update (August 2007):

The U.S. Securities and Exchange Commission has issued two investor alerts that address internet investment scams and investment-related junk faxes. The former informs you about how to spot different types of Internet fraud, what the SEC is doing to fight Internet investment scams, and how to use the Internet to invest wisely, while the latter tells you what you should know about investment-related junk faxes, including the steps you can take to try and stop them. Learn more about internet investment scams at www.sec.gov/investor/pubs/cyberfraud.htm and junk faxes at www.sec.gov/investor/pubs/junkfax.htm.
  Copyright © 2008, Certified Financial Planner Board of Standards Inc.
All rights reserved. Copyright, Collection and Dissemination of Information Policy and Legal Information.