A well-rehearsed presentation that offers an exciting shortcut to wealth and adventure.An invitation from a friend, neighbor, or co-worker to attend an "opportunity meeting".A pyramid scheme involves the collection of money from individuals at the bottom (new investors) to pay the initial investors at the top, with all emphasis on bringing in new members/investors and not on selling the product or service. Ponzi schemes are swindles in which tremendous rates of returns are paid to initial investors out of funds from later investors, who end up losing all of their money when the house of cards falls down. Often, however, the scheme is perpetuated by simple word of mouth. Advertising in the media that serves specific ethnic groups is used to identity potential victims, often with offers of employment, training or financial advice. The Attorney General urges investors to ignore anonymous financial advice on the Internet, via e-mail or advertisements.Īffinity fraud occurs when scam artists use their victim's religious or ethnic identity to gain their trust, knowing that it's human nature to trust people who are like you. They use the Internet for a wide variety of scams including pyramid schemes promotion of bogus "prime bank" investments and enhancing the sale of thinly traded stocks. The Internet's wide reach and supposed anonymity are two attractive features for scam artists. Users of these types of schemes often target conspiracy theorists, promising access to "secret" investments used by the Rothchilds or Saudi royalty. Scam artists promise investors triple-digit returns through access to the investment portfolios of the world's elite banks. The scam artist may use a combination of false promises and deceptive sales practices to convince the borrower to commit before they are able to have full knowledge of the agreement. Predatory lending consists of a variety of home mortgage lending practices, where predatory lenders will pressure consumers into signing loan agreements that are not in the consumers best interest or that they cannot afford. Many of the notes are short-term debt instruments issued on behalf of a fraudulent institution or companies that don't exist, each promising high returns upwards of 15% monthly - with little or no risk, typically with a maturity of 9 months. They are often sold by independent insurance agents. Promissory Note scams offer investors a promise of high returns at low risk. Sellers of callable CDs often don't adequately disclose such risks and restrictions to investors. Redeeming the CD early may result in large losses - upwards of 25% of the original investment. These higher-yielding certificates of deposit won't mature for 10-20 years: unless the bank, not the investor, "calls" or redeems them. People wrongly assume that if retirement money can legally be deposited in a certain deal, then that deal must have been "checked out by the IRS and blessed as legitimate." Whenever a promoter accepts IRA money there is an imputed credibility to the deal. Investors must ensure that the investment is properly registered and is being offered by a properly licensed salesperson' Many investors believe that just because an investment is being held in an IRA account, it is safe and legal. When the fraudulent or illegal nature of the securities becomes clear, investors may not only lose their entire investments, but may be faced with additional IRS and administrative penalties as well. Increasingly, unscrupulous self-directed IRA custodians are offering to hold unlawful and fraudulent securities in IRA accounts. Illegal securities Offered as Individual Retirement Account (IRA) Investments Because annuities can be a vital form of financial protection for seniors, the misleading and ill-advised information given to them can be devastating. Investors are often induced into buying annuities that are unsuitable, misguided and inappropriate for their situations. Payments are generally made on a monthly basis or in periodic installments, in most cases to supplement retirement income. A contract written by a life insurance company to provide continuing income for a specified amount of time.
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