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Debit Card Fraud – Be On The Alert

American consumers are increasingly relying on debit rather than credit cards. Debit card spending has risen steadily – growing from 47% of purchases in 2003 to 59 % in 2008.  According to the Nilson Report, it’s expected to surpass 67% by 2013. 

Criminals have definitely taken notice. Fraud detection analysts note that while there has been an increase in all types of card fraud, ATM and debit card fraud is the top area of concern.  Scammers are becoming more slick and sophisticated and incidences of debit card fraud are becoming more commonplace.   

The most notable variation of this fraud is “skimming.” Skimming, a form of ATM fraud, allows a criminal to steal a consumer’s card number and PIN code – everything needed to effectively empty the victim’s bank account. They set up equipment that captures magnetic stripe and keypad information when you input your PIN at ATM machines, gas pumps, restaurants, or retailers. 

With nearly 2 million ATM machines in operation worldwide, criminals have a wide array of potential targets. The losses due to debit card fraud are expected to continue rising as the crimes, and their perpetrators, become more sophisticated. The Nilson Report states that losses due to fraud involving credit and debit cards rose 7% between 2008 and 2009. That number is expected to total $10 billion by 2015.

There are steps consumers can take to prevent debit card fraud: 

  • When possible, use only ATMs that are located inside banks, where it’s much more difficult for a criminal to install the skimming hardware
  • Don’t type in your PIN at the pump – gas stations are notorious places for skimming software.  Use a regular credit card instead
  • Cover the keypad with your other hand when entering their PIN, to prevent any prying eyes from recording the code
  • Check your bank statements immediately and thoroughly – make sure all payments are yours
  • Closely monitor your account balance and transactions, by utilizing online banking, telephone, or by printing interim statements at the ATM
  • Contact your bank immediately if your card is lost, stolen or subject to fraudulent use
  • Keep a record of card numbers, PINs, expiration dates and 1-800 numbers for banks so you can contact the issuing bank easily in cases of theft
  • Memorize your PIN number. Don’t use your birth date, address, phone number or social security number. Never store your PIN with your card, and do not make it available to others
  • Keep your receipts. You’ll need them to check your statement. If they have your account number on them, tear up or shred receipts before throwing them away
  • Mark through any blank spaces on debit slips, including the tip line at restaurants, so the total amount cannot be changed
  • Know your limits. Many issuers limit daily purchases and withdrawals for your protection
  • Do not use an ATM if it looks suspicious, it could be a skimming device
  • Be wary of those trying to help you, especially when an ATM “eats” your card, they may be trying to steal your card number and PIN
  • Do not give your PIN number to anyone over the phone, often thieves steal the cards and then call the victim for their PIN, sometimes claiming to be law enforcement or the issuing bank

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By admin – July 27, 2010

Help Us Lead the Way … for a Great Cause

Saldutti, LLC recently announced its sponsorship of the Rangers Lead the Way Fund by participating in the ING New York City Marathon on November 7, 2010.  The Lead the Way Fund, Inc. is a non-profit organization established to raise funds in support of disabled U.S. Army Rangers and the families of Rangers who have died, been injured or are currently serving around the world. The group provides spouses and children of deceased, disabled or active duty Rangers with assistance for health and wellness programs and other services vital to the family’s well-being. Lead the Way was created in honor of Sgt. James J. Regan who was killed in Iraq in February of 2007 while serving with Charlie Company, 3rd Battalion, 75th Ranger Regiment.

Please join us in our support of this wonderful foundation.  Consider a corporate or personal donation – all contributions are tax-deductible. 

Be sure to check back over the next few month for updates on the firm’s training and fundraising efforts.  For more information on the Lead the Way Fund or to to participate in an upcoming event, visit www.LeadTheWayFund.org.

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By admin – July 19, 2010

Consumers’ Credit is Tanking – More Q&A

When it comes to managing your money, three little digits wield tremendous power over your future – and we’re not talking about your cholesterol or weight.  Once again, we’re discussing your credit score.  Your FICO score (which stands for Fair Isaac Corporation – a credit scoring model originated in 1956 to mathematically calculate risk) is the number that tells credit card issuers, mortgage lenders and other consumer finance companies how safe it is to lend you money.

According to this week’s Associated Press report, American’s credit scores have sunk to an all-time low.  Over 25% of consumers (nearly 43.4 million people) now have a credit score of 599 or below, marking them as poor risk.  It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

While there are many myths and misconceptions (see our June 29th blog post), the best way to build good credit is to manage your balances.  Here are some common questions and simple answers (courtesy of Entrepreneur magazine) to help you achieve and maintain a winning credit score.

What is the best way to establish a good credit score?

The bottom line:  Pay your bills on time – every time.

Any late payment is reported immediately to the credit bureaus, dinging your credit score, boosting your interest rates and making it difficult for you to get more credit. What’s worse, if you are a business owner, it can affect your ability to get financing. 
Should I keep small balances or load certain card for the rewards?

The bottom line:  Keep small balances on multiple cards.

Credit card companies get nervous when they see a cardholder carrying one or two cards that are maxed out or dangerously close to the credit limits. This can give the perception that you’re “living off credit.”  Although reward points and frequent flyer miles are nice credit card perks, it’s a good idea to spread out your spending and stay well within your credit limits.

Should I transfer my credit card balance?

The bottom line:  It’s better to pay off debt than just move it around.

It’s very tempting to take advantage of those zero percent APR offers that you get in the mail and shift your balances to these cards.  Unfortunately if you do this, you’re flashing a warning sign to the credit bureaus that you don’t have enough money to pay your bills. 

Should I apply for more credit cards offering great rates, rewards or savings? 

The bottom line:  Many inquiries in a short period of time indicates risk.

When applying for too many credit cards, credit lines and other financing, credit bureaus become wary – even if you never use the money. Your credit score will improve and you’ll obtain more credit if you just build up your credit history over time.  By applying for credit judiciously, your lenders will feel more comfortable with you as a borrower. 

Should I file for bankruptcy?

The bottom line:  Take all reasonable steps to avoid bankruptcy.

A personal bankruptcy filing can stay on your credit report for as long as 10 years. It’s important to do whatever it takes – a second job, a loan from a family member – to pay your bills and keep your personal credit score intact.

Would consolidating my debt help my credit score?

The bottom line:  Beware of companies offering to repair or consolidate your debt.

Settling with a lender for less than you owe will hurt your credit score for many years.  Always read the fine print and remember that there are many debt repair scams out there.   Also avoid taking extreme measures like cutting up your cards to eliminate temptation – this will only make your credit score worse.

What if my credit is shot?

The bottom line:  There’s no easy fix – but don’t give up and be patient.

Credit scores are snapshots of the past – not predictors of the future. While there’s no shortcut to reestablishing credit, you can rebuild your credit history over time by making payments promptly, maintaining low balances and spending responsibly

So how do you rate?

Your credit report score, which can range from 300 to 850, depends on a number of factors, including your credit payment history, current debt, length of credit history, credit type mix and frequency of applications for new credit.

760 TO 850 — EXCELLENT: Lender typically will offer its best interest rates.

700 TO 759 — GREAT: You shouldn’t have trouble getting loans at decent interest rates.

660 TO 699 — FAIR: You may qualify for loans but interest rates are likely to vary.

620 TO 659 — POOR: Interest rates will be very high, if you qualify.

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By admin – July 13, 2010

Credit Cards & Debt: 25 Cold-Hard Facts

Credit cards can be your best friend or worst enemy. They are one of your life’s major financial assets and you need to know how to make it work for you, not against you.  Here are some interesting facts about these small pieces of plastic (courtesy of CreditCards.com)

  1.  Average credit card debt per household with credit card debt: $15,788
  2. Total credit cards in circulation in U.S: 576.4 million, as of yearend 2009
  3. Total debit cards in circulation in U.S: 507 million, as of yearend 2009
  4. Average number of credit cards held by cardholders: 3.5, as of yearend 2008
  5. Average APR on new credit card offer: 14.10%
  6. Average APR on credit card with a balance on it: 14.67%, as of February, 2010
  7. Total U.S. revolving debt (98% of which is made up of credit card debt): $852.6 billion, as of March 2010
  8. Total U.S. consumer debt: $2.45 trillion, as of March 2010
  9. U.S. credit card 60-day delinquency rate: 4.27%
  10. 10.  U.S. credit card default rate: 13.01%
  11. 11.  In 2007, 97% of consumers indicated they used a credit card in the past year. In 2008, that number plummeted to 72%.
  12. 12.  80% of Americans 65 or older indicated they used a credit card in the month preceding the September 2008 survey. That’s 13 points higher than any other age group. They also used debit cards far less than other age groups.
  13. 13.  63% of Americans aged 25 to 34 indicated they had used a credit card in the month preceding the September 2008 survey.
  14. 14.  Just 51% of Americans aged 18 to 24 indicated they had used a credit card in the month preceding the September 2008 survey. 71% of that age group said that they had used a debit card in the same period.
  15. 15.  92% of cards included a fee for exceeding the credit limit, including 100% of all student cards. The amount of the overlimit fee is $39 on most accounts.
  16. 16.  For families having any bank-type cards, the median number of such cards remained at 2; the median credit limit on all such cards rose 21.4%, to $18,000, and the median interest rate on the card with the largest balance (or on the newest card, if no outstanding balances existed) rose 1.0 percentage point, to 12.5%.
  17. 17.  58% of Hispanics have not used a credit card in the past 30 days.
  18. 18.  31% of Hispanics typically pay cash for their purchases.
  19. 19.  More than 23 billion credit cards transactions were processed in the United States in 2007 and they are projected to grow by 26% over the next five years.
  20. 20.  Approximately 14% of Americans use 50% or more of their available credit.
  21. 21.  At about 17% each, Alaska and Hawaii have the largest concentration of consumers who use 50% or more of their available credit.
  22. 22.  Residents of Jackson, Miss., use the highest percentage of their credit limit.
  23. 23.  Lincoln, Neb., residents use the lowest percentage of their credit limit.
  24. 24.  95% of surveyed issuers have over-limit fees. The average over-limit fee, among institutions with over-limit fees, is $29.13.
  25. 25.  37% of consumers say they are using their credit cards less.

BONUS FACT:  U.S. consumers racked up an estimated $51 billion worth of fast food on their personal credit and debit cards. That is equal to 10.2 Billion Big Mac meals, 3 billion pounds of fries and 1.7 billion gallons of coke.

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By admin – July 6, 2010

10 Credit Score Myths

The technical definition of a credit score is “is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person.”  This magic number can affect everything from your credit card interest rates, to how much you pay on a car loan or mortgage, and even determine whether you get a job. But despite the importance, 4 in 10 Americans never bother to check their credit scores. What’s more, many people have incorrect theories on what influences their score when in actuality, it’s only credit history that matters.

Think you know everything about this all-powerful number? Here are 10 myths – and truths (compiled by U.S. News & World Report) – about credit scores:

Myth #1: Each person has one credit score.

Truth: Each credit reporting agency calculates a credit score for you, and they aren’t always the same. While all of the credit bureaus (Experian, TransUnion, and Equifax) use the same criteria to judge your “credit worthiness” and often come up with similar scores, they can vary because they have different information and may analyze it slightly differently.

Myth #2: You can get your score for free once a year.

Truth: While you can get your credit report once a year at no charge through sites like AnnualCreditReport.com, you almost always have to pay for your actual score (usually around $15) or sign up for an ongoing service. The good news is that you don’t really need your score as long as you regularly review your report and make sure there are no errors or problems.

Myth #3: You share a credit score with your spouse.

Truth: Each person has their own credit score, ’til death do you part.  But if you open joint accounts (including credit cards, auto loans, or mortgages) with your spouse, you will share information on your reports and late payments by one person can affect the other person’s score.

Myth #4: When you get divorced, your credit score is no longer affected by your ex-spouse.

Truth: Unfortunately, credit scores can stay intertwined long after a marriage ends. If you are still registered as a co-owner of a credit card that is also used by your ex-spouse, you are considered responsible for that debt, regardless of the state of your marriage. Post-divorce credit problems, which are common, usually can be avoided by closing joint accounts.

Myth #5: If you file for bankruptcy, your score is permanently ruined.

Truth: Not only will your credit score begin to improve after only one year of making on-time, regular payments, but after seven to 10 years, it can fully recover and lenders will be willing to loan to you at reasonable interest rates.

Myth #6: Having a good job improves your credit score.

Truth: It’s a common misconception, but your income actually has no effect on your credit score. Not even winning the lottery or inheriting a lot of money will have an impact. Again, the only thing that matters is your credit history—whether you pay your bills on time.

Myth #7: Paying off a big chunk of debt will significantly improve your credit score.

Truth: If you have a lot of debt, especially if it’s approaching your credit limits, then paying it off can improve your score.  But many people don’t realize that you shouldn’t cut up your plastic and stop using it altogether. People with the highest credit scores tend to be using about 10 percent of their total credit limits each month.

Myth #8: Staying debt-free will give you a perfect credit score.

Truth: You actually need to pay off debt in order to prove that you can manage loans responsibly. If you’ve never taken out any sort of loan, it can be difficult to persuade a credit card issuer to give you a credit card.  If you start slowly by using credit cards responsibly and paying all of your other bills on time, you can build towards a strong credit score.

Myth #9: It’s easy to fix errors on your credit report.

Truth: It can actually be quite difficult to correct mistakes, and most credit reports contain them. While credit bureaus are required by law to correct errors, the process can be tedious. The Federal Trade Commission recommends including copies of any documents that support your position as well as the copy of the report itself, with the errors circled. The FTC offers a sample dispute letter on its Web site.

Myth #10:  When all else fails, hire a credit repair firm.

Truth:  While it’s tempting, avoid paying for a credit-improvement scam: Dozens of companies offer to help improve scores for a fee, but many involve questionable tactics. Instead, just stick with the basics of paying all your bills on time, staying well under your credit limit, and keeping accounts in good standing over many years.

The Bottom Line:

People can improve their scores, which for the most part range from 300 to 850, by making their payments on time, paying off debt, avoiding using more than half of their credit lines, and keeping cards in good standing for long periods. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies (Equifax, Experian, and TransUnion) to provide consumers with a free copy of their credit report once every 12 months. By taking advantage of this, you can check for any inaccuracies or problems.  For more information on your free report, go to:  www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm.

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By admin – June 29, 2010

In the Know: How to Detect Leasing Fraud

In this age of information and technology, you might expect to learn a new, high-tech formula for detecting fraud. In fact, the same automation that creates a streamlined and efficient process can be one of the contributing factors to leasing fraud. The best ways to detect fraud still involve the simple, back to basics methods that have been proven effective and relied upon for years.

In equipment leasing, most fraud occurs when new leases are being originated. Leasing fraud typically involves a fake supplier, a fake asset, or a fake customer. Leasing fraud can range from identity theft of an existing business, to the non-existence of actual leasing equipment, to a lease applicant misrepresenting its financial strength. Small equipment customers can easily disappear.

Most equipment lessors utilize an automated underwriting process when originating a new lease and cannot effectively compete in the industry by utilizing a manual review process on all lease applications. Do some homework – such as checking references and verifying bank accounts. Contacting the Secretary of State will tell you if the company is indeed an LLC.  Judgment or litigation searches are also helpful. 

In order to detect and minimize leasing fraud, equipment lessors should establish and enforce a policy of conducting manual reviews on a certain percentage of their lease applications. The percentage of lease applications which are manually reviewed should directly correlate with the needs of the particular leasing company and the company’s past experience with fraud. When some companies detect patterns of fraud in a geographic area, they will add an extra step. In response to increased concerns in the Chicago area, our firm, serving as National counsel, began to personally verify information.   

At a minimum, a fraud screen should include an examination of the following for an entity seeking credit:

  • The consistency and validity of phone and address information
  • Recent history and frequency of the entity’s credit seeking activity

Similar checks should be done of the equipment supplier on the lease transaction. The fraud screen should be periodically reviewed and revised to incorporate the most current techniques being used to defraud leasing companies.

Over the past decade, Saldutti, LLC has been on the cutting edge of credit and collections for the equipment leasing industry.  In our years of practice, we have compiled the following list of red flags. 

 Always be on the lookout for:

  •  Vendor and lessee are from different geographic areas (particularly if the vendor is in Nevada)
  • Rush need for approval, especially without asking rate
  • Multiple trade references that seem too-good-to-be-true
  • Trade references that are vaguely similar (check wording and phrases)
  • Excellent financials or tax returns provided on a small deal without being requested
  • Appearance of financial strength but needs smallest possible advance
  • PG in difference geographic area than lessee company
  • Two “front names” (Tony Williams, John Roberts) for PG
  • Two “front names” for PG AND vendor rep

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By admin – June 23, 2010

10 Things You Need to Know About Debt

Despite recent news reports about the less-than-professional antics of some debt collectors, most agencies adhere to the government’s rules and regulations, outlined in the Fair Debt Collection Practices Act (FDCPA).  While there are always a few bad eggs, they should not spoil the bunch.  Collection law firms, such as Saldutti, LLC, invest heavily in employee training to ensure that their specialists are well-versed in the FDCPA.  Robert Saldutti, principal of the firm, lectures throughout the state of New Jersey on this specific topic. 

But more and more Americans are falling behind on their house, car and credit card payments.  So what do you need to know about the process, should you owe on a debt?

  1. It starts out very simple – if you owe, you get a letter.  If you ignore the letter, the phone calls will start.
  2.  If you do not believe the debt belongs to you, send a dispute letter – certified mail – to the collector. The collector has to stop contacting you until they can prove, in writing, the debt is legitimate.
  3.  If you owe and you just can’t afford to pay, tell the collector. The agency should work with you to get it deferred or take smaller payments until you can afford more.
  4.  In most states, a bad debt can only affect your credit for 7 years but that doesn’t mean it gets wiped clean.  Bankruptcy will affect your rating for 10 years from the date you file.
  5.  If you are pleasant and upfront with the collector, you will find that they are usually more willing to help you settle your debt.   
  6.  Debt collectors, by law, are allowed to call you Monday through Sunday anytime from 8 a.m. to 9 p.m.
  7.  The FDCPA prohibits collectors from calling “repeatedly” (meaning your phone would ring continuously).  However other than that, there are no limits placed on how many times an agency can contact you.
  8.  Collectors are forbidden from using profanity and threats as well as calling friends, family members and co-workers
  9.  Keep a paper trail of everything that you have discussed and agreed to with your creditor/debt collector and ask for his/her name.  This will avoid any confusion should a different collector from the firm contact you for follow-up.
  10.  Most importantly, don’t fear debt collectors. They are simply there to remind you that you owe someone some money, and to encourage you to get that balance squared away and get out of debt.  

Now that you know what to expect, you will be better prepared to handle the situation and maintain your rights during the process.  If you believe that the collector has not adhered to the FDCPA and that your rights have been violated, contact your state Attorney General’s Office (www.naag.org) or the Federal Trade Commission (www.ftc.gov).

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By admin – June 15, 2010

Creditors Turn to Social Media Sites to Identify Risky Customers

According to Nielsen Online, 67% of the global online population uses Facebook, Twitter, LinkedIn or a similar social media network to stay in touch with friends, grow their business or just have fun. If you’re among them and your settings are turned to “public,” who you’re talking to and what you’re discussing is available to those wanting to sell their wares — and that includes banks and other credit issuers.

Debt collectors have used this technique for a while to gather information about financial delinquents. Now lending institutions are trying to stop customers from even getting to this point by turning to Facebook and Twitter for clues.

A post on the web site, Switched, reports that officers at the Lending Club and other financial institutions are looking at people’s activities and friends on social networks; not just to verify identity and income, but as a way to enhance lending decisions that would otherwise be based entirely on credit score. Credit scores only rate a person’s history of payment, they don’t necessarily predict a person’s ability to pay in the future. Things such as status updates referencing a job search or being fired might discourage an otherwise willing lender, regardless of credit score.

A recent Pittsburg Post-Gazette article highlighted a story about a woman who had her sick-leave benefits revoked because of Facebook photos her insurance company felt contradicted her claim of suffering from severe clinical depression. Even more surprisingly, some creditors are automating this investigative process. Companies are developing algorithms that scrape information from social networks to identify signs of risk in potential customers.

It’s not shocking that, after being burned by credit scores and poor lending decisions, banks and other institutions are looking to dig a little deeper before handing over the cash. Lenders, collection agencies and insurance companies are turning to the most obvious place to snag publicly available information about people.

Take steps to guard your privacy:

  • Change your privacy settings to limit who can see their information
  • Enable “private filtering” on your browser
  • Don’t accept invitations from people until you check out their profiles
  • Be acutely aware of what you write – don’t make public anything you don’t want public
  • Take an annual inventory of all your social networking sites and delete people and information that can potentially damage you in the eyes of a creditor or employer
  • Remember that if you post something online, it’s never truly private

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By admin – June 8, 2010

30 Mind-Blowing Money Facts

Do you think you know a lot about money? Maybe you do. Maybe you don’t. But let’s see if any of the following facts, compiled by NicheGeek.com, are in any way surprising to you:

  1.  More people fantasize about money… than anything else
  2. If we could have any luxury in the world (and money didn’t matter) more of us would choose to spend money on a butler and a maid than anything else.
  3. 90% of Americans who own pets buy them Christmas gifts.
  4. Money is the leading cause of disagreements in marriages.
  5. 65% of Americans would live on a deserted island all by themselves for an entire year for $1,000,000.
  6. For $10,000,000 most of us would do almost ANYTHING! Including abandoning our family and friends and our church. A very high percentage of us would, for that same amount of money, change our race or sex. And, 1 in every 14, would even murder someone for ten million bucks.
  7. Oddly, the statistics remain the same whether it’s ten million dollars all the way down to three million. However few of us would do these things for a “measly” two million.
  8. Ninety-two percent of us would rather be rich than find the love of our lives.
  9. Money (or the lack thereof) is the biggest stress inducer in the lives of Americans. We worry more about money than our marriages, our health, or even who’s going to win the Superbowl Game.
  10. If you get your money out of a Hitachi ATM machine in Japan, it will be laundered. The machine will briefly press the bills between rollers at high enough temperatures to kill most bacteria.
  11. Most people won’t bend over to pick up money lying on the sidewalk unless it’s at least a dollar.
  12. Most Americans think pennies are a pain and the U.S. Mint should stop making them.
  13. There is about 405 billion dollars in circulation. Only 32 million of that amount is counterfeit. That means, the percentage of counterfeit money in America is .0079%. And, $20 bills are more often counterfeited than $100 bills.
  14. Do people care if their bills are crisp? Indeed, fresh, crisp, clean bills are considered much more valuable than those which are old, wrinkled and dirty.
  15. One out of every four Americans believe their best chance of getting rich is by playing the lottery.
  16. Five percent of lottery ticket buyers buy 51% of all tickets sold.
  17. A staggering 74% of us are influenced by how much we can win in a lottery as opposed to the odds of us winning.  The odds of winning a lottery jackpot are about 10 million to 1.
  18. Sunday newspaper coupon inserts are the second-most read section of the paper, after the front page.
  19. Sixty-three percent of us decide NOT to buy a product advertised on the Internet because we think the shipping and handling charges add too much to the order.
  20. Eight times as many Americans would rather use an ATM than deal with a real live teller.
  21. Eighty-three percent of Americans still pay with checks instead of credit cards!
  22. Almost 30% of us say we would need 3 million dollars to feel rich.
  23. Eighty percent of Americans say giving personal information (especially their credit card information) over the Internet still scares them.
  24. The average wedding in America costs a staggering $20,000.00.
  25. More than one-third of American women consider money more important than good sex to the success of a marriage.
  26. According to Employee Benefits Research Institute 96% of all people who have jobs right now won’t be eligible for their full Social Security benefits when they reach age 65.
  27. People tip more on sunny days than they do on dreary days.
  28. More than 80,000,000 people call the I.R.S. Information Hotline phone number every year. One-third of those calls go unanswered. And, according to the Treasury Department itself, 47% of the answers the ‘get-through’ callers receive are incorrect.
  29. Almost two out of three people have modified their financial behavior because of their fears.
  30. Almost three times as many people who live in the South worry about losing their jobs as compared to people who live in the Midwest.

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By admin – June 1, 2010

10 Tips to Protect Your Nest Egg

Older investors are among the top targets for con artists. The files of state securities agencies are filled with tragic examples of senior investors who have been cheated out of savings, windfall insurance payments, and even the equity in their own homes.  Avoid becoming a victim by following 10 self-defense tips developed for seniors by the North American Securities Administrators Association, Inc. (NASAA).

1. Don’t be a courtesy victim - Con artists will not hesitate to exploit your good manners. Save your pleasantries for friends and family members, not strangers looking for a quick buck!

2. Check out strangers touting strange deals – Trusting strangers is a mistake anyone can make when it comes to their personal finances. Say “no” to any investment professional who presses you to make an immediate decision, giving you no opportunity to check out the salesperson, firm and the investment opportunity itself.

3. Always stay in charge of your money – Beware of anyone who suggests investing your money into something you don’t understand or who urges that you leave everything in his or her hands.

4. Don’t judge a book by its cover – Successful con artists sound and look extremely professional and have the ability to make even the flimsiest investment deal sound as safe and sound as putting money in the bank.

5. Watch out for salespeople who prey on your fears – Con artists know that you worry about outliving your savings or watching your finances vanish because of an unforeseen event, like a costly hospitalization. Fear can cloud your good judgment.

6. Don’t make a tragedy worse with rash financial decisions – The death or hospitalization of a spouse has many sad consequences – financial fraud shouldn’t be one of them. Unfortunately, a con artist’s ideal victim is likely to be an “elderly widow.” If you find yourself suddenly in charge of your own finances, get the facts before you make any decisions.  Ask for advice from friends and family members, take a course through a local university or library, or seek out a reputable financial professional.  Arm yourself with information to protect what is rightfully yours.  

7. Monitor your investments and ask tough questions – Keep an eye on the progress of your investment and insist on regular written reports. Look for signs of excessive or unauthorized trading of your funds. Don’t let a false sense of trust keep you from demanding a routine statement of your accounts.

8. Look for trouble retrieving your principal or cashing out profits – If a stockbroker, financial planner or other individual stalls you when you want to pull out your principal or profits, you have uncovered someone who wants to cheat you. Some kinds of investments have certain periods when you cannot withdraw your funds, but you must be made aware of these kinds of restrictions before you invest.

9. Don’t let embarrassment keep you from reporting investment fraud – Con artists prey on your sensitivities and count on these fears from preventing or delaying the point at which authorities are notified of a scam. Every day that you delay reporting fraud or abuse is one more day that the con artist is spending your money and finding new victims.

10. Beware of “reload” scams – Don’t compound the damage by letting con artists “reload” and take a “second bite” of your assets. Faced with a loss of funds, some seniors who have been victimized once will go along with another scheme in which the con artists promise to make good on the original funds lost … and possibly even generate new returns beyond those originally promised. Though the desire to make up lost financial ground is understandable, all too often the result is that you lose whatever savings you had left in the wake of the initial scam.

Basic Ways to Steer Clear of Fraud:

  • If it seems nearly impossible to evaluate an investment product’s underlying risks, “avoid it like the plague”
  • Don’t sign anything presented as “top secret.”
  • Don’t withhold information about your new investment from your financial advisor
  • Don’t invest with your home equity                                                  

Things you should do:

  • Start with your own background check on the investment and the company via your state securities department. Extensive background information is available from the Central Registration Depository (CRD) files.  Go to nasaa.org and click on “Contact Your Regulator.”
  • Seek out the background of the salespeople involved in creating and selling a product is also important. Check with state securities regulators everywhere the people have lived for any actions brought against them. Check federal or state databases for bankruptcy or criminal filings, too.

The Bottom Line:

An investment that is right for you will make sense because you understand it and feel comfortable with the risk involved.

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By admin – May 26, 2010