Financial Fraud: Do You Believe that It Could Happen to You?
FOR IMMEDIATE RELEASE
March 6, 2013
Financial Fraud: Do You Believe that It Could Happen to You?Do you know of someone who has been a victim of financial
fraud? Nationally the problem of
consumer fraud is huge. The Financial Fraud Research Center in in their report
"Scams, Schemes & Swindles: A Review of Consumer Financial Fraud Research"
estimates the annual cost of consumer financial fraud in the U.S. as
approximately $50 billion." What does this mean for the average consumer? It's
hard to say as losses vary tremendously. However, the FTC estimates the median
amount loss in 2012 was $537.
It's not only the financial amount loss that hurts victims;
victims also lose time and may be affected psychologically. One study reported
that 29% of investment fraud victims experienced major depression following the
fraud.
Fraud is often under-reported. Unfortunately most people fail
to report fraud when it happens to them. According to an AARP study, "Only 1 in
4 investment fraud victims, having lost between $1,000 and $25,000 in a scam,
admitted to having been scammed or swindled in the preceding 3 years. "
You may think that you are safe from financial fraud because
of your age, education level, gender, or race. However, the research does not
support this. Contrary to popular belief, fraud doesn't just happen to lonely,
uneducated, older women.
By reviewing 20 years of fraud research, the Financial Fraud
Research Center has compiled a typical victim profile for both investment fraud
and for lottery scam fraud. Investment
fraud victims are more likely to be "male, relatively wealthy, risk-taking,
interested in persuasive statements, open to sales situations, and better
educated than the general public." Does
this sound like you? If so, remember to be extra careful when investing as you
may be targeted by investment cons.
Lottery scam victims are "more likely to be female, older,
single, lower income, interested in persuasive statements, open to sales
situations, and less educated than the general public." If you feel that you
don't fit in either group, keep in mind that several national studies indicate
that young adults are more likely to be victims than older adults. Why does
this research matter? Because once you
believe you could be a fraud victim, then I think you'll do a better job of
protecting yourself.
Con artists are good at what they do. Take steps to protect
yourself by following these tips. Before investing in any product, ask questions. Take time to
check that both the investment and the person selling the investment are
legitimate. Check that the investment option you're interested in is registered
with Illinois Securities Department. Call 1-800-628-7937 or visit their website
at http://www.cyberdriveillinois.com/departments/securities/.
If it is not registered, then this is likely a fake investment.
Also, people selling investments must be licensed. Visit
FINRA BrokerCheck (http://brokercheck.finra.org) or call FINRA at (888)
295-7422 to be sure the person you're dealing with is licensed.
If you are feeling pressured to do something, end the
conversation. Don't take any action or give any personal information about
yourself. Be wary of anyone urging you to act fast, without time to think.
Talk to someone else first. Be especially careful about
anything that you're asked to keep secret. This is a definite red-flag for
fraud. Another red-flag is if someone asks you to send money in order to
receive a prize or special offer.
And last but not least, if it sounds too good to be true, it
probably is. If you would like more assistance evaluating whether or not an
investment is likely to be a fraud, check out FINRA's Investment Scam Meter at http://apps.finra.org/meters/1/scammeter.aspx
. This four question tool provides a good overview of investment "red flags"
that can be likely to lead to fraud.
If you have been a victim of fraud, report it to your local
police as well as file a complaint with the Illinois Attorney General's office;
call 800-243-0618 or complete a form at http://illinoisattorneygeneral.gov/consumers/filecomplaint.html.
Not only may these organizations be able to help recover the money you lost,
their efforts also may stop the fraud from continuing.
Source: Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension, March 2013
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