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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.

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 Update (Winter 2007/2008 Update):
Know Your Limits: Why, When and How to Be Sure You’re Fully Protected by FDIC Insurance
A deposit in an FDIC-insured bank or savings institution is one of the safest ways to protect your money. The FDIC protects those deposits under federal law, with basic insurance coverage up to $100,000 per depositor per insured institution, in the unlikely event that a bank fails. There may even be situations where your deposits are covered for more than $100,000. The FDIC provides an interactive Electronic Deposit Insurance Estimator that allows users to calculate the insurance coverage of their accounts and generate a printable report that clearly states if their deposits are fully insured or not. Read more at:
www.fdic.gov/consumers/consumer/news/cnwin0708/limits.html

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 (updated March 14, 2008):
Foreclosure Resources for Consumers
If you are having difficulty making your mortgage payment, one of the most important things you can do is seek assistance. The Federal Reserve Board offers information and links from the Federal Reserve and other government agencies that may be able to help you. For more information, visit the Federal Reserve Board Web site at:
www.federalreserve.gov/pubs/foreclosure/

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 (March 3, 2008):
FTC Cautions Consumers About Tax and Rebate Scams
The tax rebates many Americans will receive this year, as part of the government’s economic stimulus package, will give many a financial boost. Unfortunately, con artists are also seeking to profit from the rebates by contacting consumers with claims to be with the IRS, the Social Security Administration, or some other government agency. The fraudulent phone and e-mail messages claim to need some bit of sensitive personal information to process the rebate check; those who provide such information may be at risk of identity theft. The FTC reminds consumers that neither the IRS nor the SSA collects information about government rebate qualifications by phone or e-mail. Read more about how to recognize and protect yourself from these scams at:
www.ftc.gov/opa/2008/03/tax.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 (March 13, 2008):
Reverse Mortgages: Avoiding a Reversal of Fortune
As more and more Americans near retirement age, financial institutions are aggressively marketing financial products and loans to those in retirement. Reverse mortgages are one of those products. While they can be helpful to homeowners who want to stay in their homes but are having trouble keeping up with their mortgage payments, or who have no other source of funds to pay bills or meet unexpected expenses, reverse mortgages can be complicated and pose risks for one’s financial future. FINRA provides information to help individuals make informed decisions about whether a reverse mortgage is appropriate and how to make prudent use of any loan received through a reverse mortgage. Read more at:
www.finra.org/InvestorInformation/InvestorAlerts/RetirementAccounts/ReverseMortgagesAvoidingaReversalofFortune/P038113

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 Update (March 2008):
What to Do if a Health Insurance Company Denies Your Claim
Major illness or a stay in the hospital following an accident can be stressful. It's not a time you want to be worried about your insurance coverage. However, for some insurance consumers, this is when they are hit with a denial — notification their insurance company won't pay all or part of a claim. To help understand your options when a claim is denied, the National Association of Insurance Commissioners (NAIC) suggests a number of steps, which can be found at:
www.naic.org/documents/consumer_alert_claim_denials.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:
Shopping for a CD? Ask the Right Questions to Avoid Disappointment
Not all Certificates of Deposit (CDs) are created equal, and “Callable CDs” are significantly different than the traditional CD. While Callable CDs often have higher yields than traditional bank-issued CDs, they may require a 10-, 20- or even 30-year commitment. Investors should be careful and may want to use a Callable CD Checklist that provides questions to ask when you’re considering a callable CD, as well as a helpful glossary of terms related to callable CDs and a form on which you can record important information. Read more at:
www.nasaa.org/Investor_Education/Investor_Alerts___Tips/293.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.
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