Sequence Inc. Fraud Files Blog

The Colorado Division of Securities has a little quiz to help you see if you know anything about investment fraud, or if you’re a scam victim waiting to be taken advantage of. In addition to the quiz which helps you see if you can spot an investment scam, there’s also a checklist to help you evaluate these investment “opportunities” in the future.

The checklist and my comments:

• Too little information - If someone wants your money, they should be ready to fully disclose all the details about their scheme
• Too many personal questions, too soon - Keep your personal data personal until you know more!
• Spotty or absent credentials - Who is this person offering you this opportunity? Who do they work for? What’s their background?
• Too much account activity - Are you suddenly paying a lot of commissions or unusual fees?
• Too much hype - All is rosy, this company is the greatest thing out there… This could be a “pump and dump,” in which you get excited, hand over your money, and the thing tanks. Bye-bye money.
• High-pressure tactics and guarantees - Beware of them telling you this opportunity won’t be around long and you might miss out. Even worse are guarantees of high rates of return. Scam!
• An offer to get your money back - If you’ve lost money in an investment scam, don’t pay someone who says they’ll get the money back for you. You’ll just be out more money.
• A stranger speaks up - Beware of people contacting you because of a supposed connection through church or a social club. Many scams prey on common interests - especially churches - to gain your trust and get you to fork over your money.
• It sounds too good to be true - If it sounds too good to be true, it almost certainly is. Stick with traditional investment accounts and known investment advisors. These fly-by-night make-a-lot-of-money schemes are almost always nothing more than a scam to get your money.