LAST week, Ana (not her real name), approached me regarding her situation. She has “loaned or invested” $182,000 to someone who is now missing with the lure of extremely high investment return.
So many times I have been personally offered these sales pitches myself. My simple and easy answer, “If it sounds too good to be true, it probably is!” There are no guaranteed returns on an investment unless you are putting it on a fixed product.
How can someone like Ana fall into such a prey, almost giving up every hard-earned dollar they have? Simple.
Scam artists are masters of persuasion, who create their sales speech to match your psychological profile. They ask friendly questions at first, questions about your health, family, political views, hobbies or prior employers. Once they get an idea of who you are, they are able to present a sales pitch designed just for you. Don’t fall for it! Know the most common tactics and be aware of your financial footprint.
If you want to recognize a con attempt before you get burned, you have to learn to think like a con. With a little bit of education, you can protect yourself and those around you from getting scammed.
Ask lots of questions and demand answers. The things that cons don’t like are questions, because it gives them too many opportunities to slip up and say the wrong thing. So ask as many questions as you can think of and then listen to what they say. If something sounds fishy, it’s probably a con.
Look out for the get-rich quick schemes. If someone is offering you huge returns in person, over the phone, by email or by letter, it’s probably a scam. Money doesn’t grow on trees, so no one is that willing to just give it away to complete strangers.
Take note of the exaggerations. Con attempts are full of exaggerations and white lies. They have to make things sound better than they really are. Case in point, the now very famous Madoff case, preying on who’s who of American culture.
Watch the clock. You can recognize a con attempt when someone offers you something for a limited time only. If someone says that you can make a great investment but you have to do it today because the offer is off the table tomorrow, it’s a scam.
Read the fine print. A real company will have tons of literature for you to read as well as a website and an 800 number. While a con artist could pull an elaborate scheme and have all of these things, it’s unlikely that they will go as far as to fill in all the particulars. Look for legal information on their website as well as in their documentation before doing business with anyone. Anyone selling investments should have the proper license before approaching clients. Ask for it and demand proof.
Remember that a legitimate investment company or its representative will have to analyze your Investor Profile, which includes your investment experience, risk tolerance, lifestyle and expectations, and liquidity before they can recommend a set of portfolio for you to invest in.
Assuming that the representative you’re talking to is someone you could trust, research the company he or she is representing. Chances are, he is probably at the bottom pole of network marketing, and he is even unaware of the real activities of the company represented. He was just told to do as instructed.
* * *
Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
* * *
Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.