You are on page 1of 1


(601) 856-0911 I (205) 758-8610
Circulation =2550
I! III III 111111111111 111111111 11111111
HoW" To Spot Red Flags Of A
ScaDl On InvestDlent SeDlinars

Falling victim to a fraud­
ulent investment scheme
can mean losing anywhere
from a few hundred dollars
i.o your life savings. While
mOHt people might not see
the harm in sitting through
an investment seminar, the
Better Business Bureau
B..!}Ji) recommends re­
searching the investment
first, rather than
run the risk of falling for a
financial siren song over a
free lunch.
Investment scams and
schemes can come in many
forms and a common tech­
nique to lure people in is
the offer of a free financial
Heminar over lunch. In one
recent example, the Securi­
ties and Exchange Commis­
sion shut down a Ponzi
scheme which stole $20 mil­
lion from retirees in Califor­
nia and Illinois. The scam­
mers invited senior citizens
to estate planning seminars
and later coaxed their vic­
tims into buying promis­
sory notes for purported
Turkish investments.
"This may seem like an
easy way to get a good meal,
but you run the risk of being
drawn in by slick promoters
who promise big returns on­
ly to find out that you've lost
your money," said Bill Moak,
President of the BBB Serv­
ing Mississippi.
When listening to an in­
vestment pitch, BBB recom­
mends looking for the fol­
lowing red flags:
• Requires a large up­
front investment. Untrust­
worthy schemers might try
to convince investors to pay
a lot of money upfront so
they can get out of town
with a large haul, rather
than wait for the funds to
trickle in.
• Promises high returns
for low risk. Every invest­
ment comes with a level of
risk. Typically the amuunt
of risk increases in line
with the potential return on
the investment. If the semi­
nar is trying to sell an in­
vestment scheme that
claims a high return with
little or no risk, beware,
even if it comes with the
promise of a money-back
• Employs high pressure
sales tactics. Seminar lead­
ers often use high pressure
sales tactics to get people to
sign up without thinking it
through. They might claim
that there are only a few
spots left or that you need
to get in on the ground floor
today to see the largest
earnings. Any reputable in­
vestment company will let
you take your time and do
your research and will not
pressure you into signing a
• Relies on off-shore in­
vestments. Many hucksters
try to give their scheme an
air of sophistication by rely­
ing on overseas invest­
ments such as foreign cur­
rency, property, stocks and
bonds. They also might
claim - incorrectly - that
you can avoid taxes by in­
vesting overseas.
• Sounds too good to be
true. At the end of the day,
if the offer sounds too good
to be true, it probably is. Al­
ways listen to your instincts
because the potential payoff
is rarely worth the risk.
For more advice from
your BBB on financial plan­
ning and investing, visit­