If you have received an email, phone call or letter inviting you to invest in an incredible deal with no risk and high returns, you are not alone. Eighty percent of Americans receive financial fraud invitations on a regular basis, according to Lori Scharmer, North Dakota State University Extension Service family economics specialist.
According to a survey conducted by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, Americans are being bombarded with fraudulent financial offers. Of those responding to the survey, 16 percent reported they invested money in a fraudulent investment scheme and 11 percent said they lost a significant amount of money.
“Financial fraud may be costing Americans up to $50 billion annually,” Scharmer says.
Older Americans are particularly vulnerable. Americans age 65 and older are more likely to be targeted by fraudsters and more likely to lose money once targeted, according to the FINRA foundation.
"When it comes to financial fraud, America is a nation at risk," says Gerri Walsh, FINRA foundation president. "Fraudsters are very effective at reaching and enticing vulnerable populations into turning over their money. And far too few Americans are able to detect likely fraudulent sales pitches."
Scharmer says some red flags to watch for are:
- Receiving an unsolicited email asking for money
- Being invited to an “educational” investment meeting that turned out to be a sales pitch
- Receiving a letter stating you have won a lottery or prize with a cashier’s check enclosed
- Receiving a cold call from a stranger offering an investment opportunity
- Receiving invitations to participate in an investment that offered a commission for referring other investors
“Never invest in an opportunity that promises ‘guaranteed’ or ‘risk-free’ returns because they are not legitimate,” Scharmer says. “North Dakotans are just as susceptible to financial fraud as the rest of the country, so be vigilant and watch out for vulnerable family, friends and neighbors.”
If you think you may have been a victim of financial fraud, contact the North Dakota Securities Department at (800) 297-5124 to file a complaint.
“Securities Commissioner Karen Tyler takes financial fraud very seriously,” Scharmer says. “Her office is able to assist North Dakotans who have been victims.”
Scharmer advises that when looking for investments, you should work with one of the many financial professionals in communities across North Dakota. A trusted financial adviser can be found through your bank, credit union or a financial service firm.
“Good advice when encouraged to invest money is to ask, check and investigate before investing even $1 of your money,” Scharmer says.