Beware of investment scams

NORTH PALM BEACH, Fla. (6/14/01)--The North American Securities Administrators (NASAA) says now is a prime time for investment scams. When Wall Street suffers, the swindles increase. Such scams include:

  • Unlicensed independent life insurance agents. These agents sell securities without a license. To verify that someone is licensed or registered to sell securities, call your state securities regulator.

  • Pay phone and ATM sales. Companies and individuals (many of them independent life insurance agents) took nearly 4,500 people for $76 million, selling coin-operated, customer-owned telephones. In March, 25 states announced actions against such companies and individuals.

  • Callable CDs. These are higher-yielding certificates of deposit that are "called" before they mature. The result is large losses, up to 25% of the original investment in some cases.

  • Internet stock fraud. Chat rooms and message boards are targets of scammers who use them to offer bogus financial advice--don't follow anonymous financial advice on the Internet.

  • Investment seminars. Be skeptical about the get-rich-quick seminars that are advertised through newspaper, TV, or radio. Often, the only people getting rich are those running the seminar.
Check out the investment or seller with your state securities division. Also check the Central Registration Depository for background on a broker.

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