Forefront | Blog
Investment Fraud Mitigation
December 8, 2023
American consumers lost approximately $3.8 billion to investment fraud in 2022 according to the U.S. Federal Trade Commission (FTC). Michigan ranked #19 nationwide with $38.6 million lost and 412 victims due to investment scams. That’s an average of $94,000 per victim.
Some best practices for protecting against investment fraud include:
- Check the background of the financial advisor and make sure they are licensed.
- Vet the quality of returns data for a particular product or investment fund, in particular those that offer guaranteed returns.
- Be alert to red flags about a company’s deteriorating cash situation or the departure of key managers.
- Research whether a company has been the subject of enforcement or litigation or both.
- Avoid aggressive sales tactics that pressure you into making hasty decisions about investments.
- Avoid anyone that will not provide you with the information in writing or willing to meet with you in person.
- Take advantage of available educational resources related to the various frauds including real estate fraud, Ponzi and pyramid schemes, artificial intelligence, cryptocurrency fraud, pump and dump schemes, elder fraud and others.
