You work hard for your money and you try to save and invest it wisely. You trust that the people at the financial institutions and other investment companies you deal with are treating you honestly and with the integrity required to keep your money safe, secure and growing.
According to FINRA (Financial Industry Regulatory Authority), which regulates brokerage firms and exchange markets in the U.S., 1,989 individuals were barred from the industry and another 2,722 were suspended during the five-year period from 2016-2020. A total of 68 firms were expelled from the industry and another 101 were suspended in that span, with $396 million in fines and $173 million in restitution assessed.
But how do you know when you have been taken advantage of, or worse, your nest egg has been compromised or drained by an unscrupulous financial adviser? What can you do legally to fight financial swindlers, con artists and scams to avoid investment fraud or securities fraud? Do you need a lawyer who specializes in financial fraud to assist you in protecting your investments?
Here are 10 warning signs that may indicate trouble with your financial accounts and that you may need to contact a financial fraud attorney:
- You bought financial products over the phone or via email or the internet. You were contacted by someone over the telephone, via email, through one of your social media accounts or after you clicked on a link on your computer or phone. The company’s name was not familiar. But they made some big promises and convinced you to buy one of their financial products. Now everything is not adding up and you’re wondering if you made the right decision.
- You have bad credit and/or few assets, but they approved you anyway. Buying stocks or opening a brokerage account always requires a credit check. If you have bad credit, it should be a concern for the broker. If no one raises a question about your bad credit, it should be a concern for you as an investor.
- You got the “used car lot” vibe during the sales pitch. “The deal expires tonight,” is just one of the ways scammers will try to twist your arm into making a sale. Fast talkers who don’t answer questions and who confuse you with technical terms exist to separate you from your money. Hasty decisions are often regretted, so sleep on it and get a second opinion before you make a commitment.
- The pitch letter or email contains bad grammar, typos and other mistakes. Most reputable investment firms and brokerages employ experienced communications experts to convey their message in a professional manner. Bad grammar, typographical errors, misspellings, and poor formatting are warning signs that the other work the firm proposes to do may be of poor quality. If they can’t spell properly, maybe you shouldn’t invest with them.
- You have trouble contacting anyone after the sale. Your attempts to contact anyone related to your account are met with futility. Your phone calls go unanswered, messages are not returned, or you experience website access problems. The company has no physical address, or mail is refused or returned. How many of these boxes do you need to check before you realize they don’t want you to find them?
- The website associated with your account is not secure or has other red flags. Perhaps you can access the company website, but it is not a secure site (the URL should begin with https:// – the “s” is important because if it’s not there, the site is not secure). That is a huge red flag for any commercial website, especially one where financial information is stored and accessed.
- You get calls from your bank to verify information. Sometimes an investment scam is actually designed to extract personal information, so beware of calls from a “bank” or “financial service provider” that request bank account information, pin numbers, passwords, or other personal data. Some scammers even design fake websites to convince unsuspecting investors of their legitimacy. Never provide your Social Security number over the phone and only provide other personal or financial information over secured connections.
- Your record-keeping does not match the financial statements you receive. If you keep scrupulous records of your financial transactions and activities, you should be able to easily reconcile those records with the monthly statements from your bank or broker. But when those records do not agree – especially if they are off by a large amount or are not corrected promptly – you have a problem.
- Fees change without notice, unauthorized, abrupt or excessive trades occur, or investments skew heavily to one particular instrument. In addition to your records not matching those of the bank or investment company, you may encounter other anomalies on your statement that should be concerning. If your fees change without notice or unauthorized, abrupt or excessive trades occur, or your investments skew heavily to one particular instrument, your broker may be engaging in illegal or unethical activity at your expense.
- If it sounds too good to be true, it probably is. It’s a cliché, but tried-and-true advice. Nobody can guarantee double-digit returns in a changing economic market. All investments have some degree of risk. While some companies may post huge gains year-over-year, they would be foolish to guarantee better-than-normal profits, as would any experienced, professional financial advisor. The pundits may predict that a company’s stock value may soar, but many of these prognosticators are wrong as often as they are right about these things. Do your homework before you invest! Don’t get suckered by a financial advisor who promises fast, high-yield returns with little or no risk. You could be walking into a Ponzi scheme.
Call a Qualified Financial Fraud Attorney Today
Be aware of the warning signs listed above to avoid getting scammed out of your hard-earned money by a financial fraudster. If you realize you have already invested in a get-rich-quick scam, you should definitely speak with a qualified financial fraud attorney near you before you lose your precious investment.
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