Protecting you and your family from financial fraud this holiday season

Posted December 12, 2013 at 2:24 pm

by Secretary of State Jason Kander

As generosity multiplies during the holiday season, so too do the scammers aiming to prey on – and benefit from – the surplus of good will.

Many of the consumer scams are well-known: bogus charity solicitations, spam email seeking bank account numbers and personal information, and fake or already redeemed gift cards. Caution and vigilance can help protect you from these costly tricks. If red flags appear, it’s wise to slow down and take additional time to investigate the facts.

Less well-known but equally deserving of caution and vigilance are cases of financial fraud and threats to any Missourian with savings. Scams targeting seniors and other vulnerable populations are particularly concerning. As Missourians get together over the holidays, it may be a good time for families to discuss best financial practices for children, parents and caretakers. To prepare for that discussion, I encourage you to review the threats discussed below, along with strategies to avoid being taken in by them.

Be wary of individuals who claim to have trading expertise and offer to set up or “manage” an online brokerage trading account on your or another investor’s behalf. Allowing unlicensed individuals to set up an account in somebody else’s name or utilize that individual’s username and password can lead to substantial trading losses and account theft.

Missouri law requires that investment professionals and the products they sell be registered with my office. Use extreme caution when being solicited with an investment opportunity, as unregistered salespeople or products often overlook important safeguards for investors. The best way to protect yourself is to call my office’s Investor Protection Hotline at 1-800/721-7996 before making any investment.

“High yield” and Ponzi investment schemes are a perennial financial danger. It is essential to remember that high yield means higher risk and these types of alternative investments are favorites of scam artists. Generally, they promise an incredibly high return with low risk, offer a reasonable explanation of why the investment is so good or claim false credentials to earn your trust. Eventually, the house of cards collapses.

Even as housing prices continue to recover in many U.S. markets, investors should be aware that schemes related to new real estate development projects or buying, renovating, flipping or pooling distressed properties are popular with con artists and can create potential for fraud.

Finally, take a cautious approach to investment fads. digital currency, crowdfunding, oil and gas investments and other new investment opportunities may sound appealing, but could open the door to enterprising fraudsters.

Missourians’ savings from years of hard work should never be compromised by bad actors out to deceive trusting family members. All Americans deserve to retire with dignity, and in planning your family’s financial future, these precautions will help safeguard your investments for the coming years.

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