Dunnan on Dollars Personal Finance Tips from Nancy Dunnan Judging Your Risk Level For Investment Fraud
June 19, 2009 - Last week in this column, we told you about the IRS' "Dirty Dozen" tax scams...so you will recognize them and thus protect yourself from unsavory types looking to take your money. (Click here to read.)
The IRS is not the only group thinking warning Americans about investor fraud.
The Financial Industry Regulatory Authority (www.finra.org) just issued a series of alerts to help investors spot and avoid the types of persuasion tactics fraudsters use. In addition to the warnings, the organization has also developed two useful tests that everyone, even the most sophisticated investor, should take.
The Scam Meter
Particularly helpful (and definitely unique) is FINRA's Scam Meter (http://apps.finra.org/meters/1/scammeter.aspx). It will quickly determine whether an investment opportunity is too good to be true.
You will be asked to identify where you heard about the investment. If the investment is guaranteed. If there are only a few left. And similar questions. For each of your answers that sends up a red flag, you will be given pointed advice and specific solutions.
The Risk Meter
Equally valuable is FINRA's Risk Meter (http://apps.finra.org/meters/1/riskmeter.aspx). Through a series of 12 easy-to-answer questions it determines whether or not you possess characteristics and behavior traits that make you vulnerable to investor fraud.
For example, you will be asked: - Have you ever check with a securities regulator to see if a professional was licensed before doing business with that person?
- Have you or would you buy stocks priced under $5?
- Do you live alone?
Then, based on any areas of weakness you may have, you will be sent to material and advice that will help you address your vulnerability.
Had those who invested with Bernie Madoff (who incidentally will be sentenced on June 29) taken these two simple quizzes, they might have backed off from his promises of extraordinarily high returns.
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This weekend, take time to run through both tests - with your family and/or friends.
(On a personal note, I find it curious that we tend to say or write "family or friends." Cannot family be friends?)
Bottom line: If you take both tests, let me know and I will send you a free copy of my new book, "Recession Proof Your Financial Life," just published by McGraw-Hill. Email me at: NDunnan@aol.com. In the subject line, type "The Online Investor."
- Nancy Dunnan
RECENT COLUMNS by Nancy Dunnan The IRS Warns of Dirty Dozen Tax Scams
It's Never Too Late to Learn
It Pays to Scoot Around
Shopping The Garage Sales
How to Throw a Great Garage Sale
Your FICO Score and Why It's Important
Tax Rules When Selling Your Home
Recession Proof Your Travel Dollars
At Home Offices
Dining Deals
Credit Cards - Paying Off & Reducing the Rate
Car Deals and Tax Credits
COBRA Changes
Job Search Tax Deductions
Finding Forgotten Money
Lower Heating Costs
Converting IRAs to Roth: New Considerations
Financial Counseling for Military Families
Help For Seniors
Giving Gifts That Do Good
Finding Part-Time Work
Travel Deals - The Bright Side of a Downturn
FDIC Raises Bank Account Insurance
Slashing Your Grocery Bill
Picking the Right Executor
Zipping Around Town - Cars by the Hour
Collecting Social Security
If you want to suggest a column topic for Nancy, drop her a line.
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