Avoiding affinity fraud, as with any other investment advice or product, involves taking precautions. There are several steps a careful investor can take to significantly decrease the possibility of being a victim of affinity fraud:
Investors should be on guard when some one uses testimonials from group members in connection with soliciting investments.
Be wary of promises of high returns of your investment.Early and high returns on investments may only be indicative of a “Ponzi” scheme, which involves the use of later investors' money to pay earlier investors. These early investors become unwitting, but enthusiastic promoters of the scheme.
Always get an investment offering in writing. A legitimate promoter should always willingly provided detailed written materials describing the uses of your funds, the risks involved in the investment, financial statements, and any conflicts of interest that the promoter may have.
Once obtaining written disclosures, it is always a good idea to seek outside professional advice.An independent accountant,financial planner, or attorney can help you to evaluate the investment.
Do not rush into making an investment decision.If the promoter is requiring you to make a hasty decision, it is likely that the investment is scam. There are many legitimate investments available in today's market. You should not let yourself be rushed into investing in a fraudulent one.
The Arizona Corporation Commission-Securities Division can help. Before you actually put your money into the investment, call the Securities Division to learn whether you are dealing with a registered salesperson and firm. A simple inquiry into whether the person and firm touting the investment are licensed in Arizona can speak volumes. Don't just take the word of a salesperson; check the investment out for yourself.
To contact the Arizona Corporation Commission-Securities Division, call (602) 542-4242, or send us an e-mail at sec@ccsd.cc.state.az.us, or visit the Division's web site at www.ccsd.cc.state.az.us. |
