Consumers lose billions of dollars every year to investment fraud. It touches all segments of society, every level of income, and every age. Investors are lured by the promise of high returns or huge tax savings with little or no risk. Sounds too good to be true? Well, it usually is. Far too many investors plunge into investments without first investigating them. The same scams are used over and over again on people who do not take the time to check out the offers or learn the danger signs.
The Securities Division is a division of the Office of Secretary of State. This office regulates investments sold in Missouri and the people who sell them - financial advisors, financial planners and the companies they work for. If you would like to check the registration of the promoted investment, inquire about the registration status and possible disciplinary history of an investment professional, or if you need to file a complaint, contact the Secretary of States' Office, Securities Division's Investor Protection Hotline at 1-800-721-7996
Be wary of unexpected phone calls, letters, e-mails, or personal visits from strangers who offer quick-profit schemes that require an immediate investment.
Be skeptical of any promise that the investment is guaranteed or that you can "double your money" or expect some other high return on your investment within a short period of time.
Turn down money requests accompanied by high-pressure warnings such as "Tomorrow will be too late" or "Act now because there will soon be a long waiting list of others who want to take advantage of this great opportunity."
Always demand written information about the organization behind the investment plan and its track record. Bear in mind, though, that printed documents can easily be created, forged, or falsified.
Be suspicious of claims of "inside information", hot tips, and rumors that supposedly will give you a big advantage over other less knowledgeable investors.
Ask for a prospectus, offering circular, financial statement, or similar document before you consider investing. Then read the small print carefully and make sure you understand the terms thoroughly before signing any kind of commitment.
Get an outside opinion on the information in the prospectus from a professional such as your attorney, financial advisor, accountant, or other reliable consultant, before making a commitment.
Check it out with the Secretary of State's Office, Securities Division to confirm that the company or individual is properly registered to sell securities in Missouri and whether there have been any complaints and violations of law. Contact the Investor Protection Hotline at 1-800-721-7996.
Know who you’re dealing with whenever possible. Deal with established businesses whose reputations are known and respected in their communities.
When in doubt – Hang up. When in doubt, make no promises or commitments, no matter how tentative. It is far better to wait and lose an opportunity than to take the plunge and lose everything. When hounded on the phone by an aggressive promoter, do not be afraid to hang up without explanation. You don't owe the caller anything, no matter how nice the caller may seem. In fact, this kind of solicitation is an invasion of you privacy, and may be a violation of federal and state law.
Learn the ABCs of Investing
Ask Questions, Beware of fraud, Call the Investor Hotline
Before you invest, check out the investment and the financial advisor by contacting: