Investing Red Flags

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Watch out for common tactics used by investment scammers and avoid fraud.

For more information, visit investor.gov.

Guarantees

Unregistered Products

Overly Consistent Returns

Complex Strategies

Missing Documentation

Account Discrepancies

Unauthorized trades, missing funds or other problems with your account statements could be the result of a genuine error—or they could indicate churning or fraud. Keep an eye on your account statements to make sure account activity is consistent with your instructions and be sure you know who holds your assets. For instance, is the investment adviser also the custodian of your assets? Or is there an independent third-party custodian? It can be easier for fraud to occur if an adviser is also the custodian of the assets and keeper of the accounts.

Source: Red Flags of Fraud | FINRA.org

Pushy Salesperson

Fake Testimonials

Sounds Too Good to Be True

Skyrocketing Account Values

"Phantom Riches" Sales Pitch

"Source Credibility" Sales Pitch

"Social Consensus" Sales Pitch

"Reciprocity" Sales Pitch

"Scarcity" Sales Pitch