Your investment approach should change as you grow older to fit your changing needs. Be wary of con artists who will take advantage of this period of change in your finances. Alert the Iowa Insurance Division if you suspect one of these scams is happening to you or someone you know.
Affinity Fraud | Affinity fraud targets identified groups such as religious or ethnic communities. Scammers begin by targeting a leader or respected member and using that member’s influence to attract more investors in a pyramid-type scheme. |
Free Dinner Seminars | Free meal seminars are often advertised in local newspapers, on websites or through mass-mailed invitations or emails. Many of these are used to sell investment products and open new accounts for attendees with the sponsoring firm at the seminar or through later contact with attendees. |
Gold and Precious Metals | These are always risky investments. It may be a scam if the seller is convincing you to invest in gold mining or to purchase gold or other precious metals, which will be delivered to a secured facility. Be sure the company is genuine, and take measures to ensure the gold or precious metal you invested in does exist. |
High-yield Investment Products | Scammers claim they have access to the leading European or foreign financial institutions or banks and suggest they are enrolling you in an elite investment venture. These scams promise high returns at little or no risk to you. Be wary of high-yield investments using the term “prime bank” investments. |
Oil and Gas Drilling Programs | These programs can be scams, especially those claiming a particular well is guaranteed to produce high returns or have attractive tax advantages. |
Ponzi or Pyramid Schemes | These scams promise high returns for investors but collapse when new investors can’t be found. These schemes use funds from new investors to pay off the initial investors, but the scammer usually has spent the money before it collapses. |
Private Placement Offerings | Also called regulation D, rule 506 offerings, these can be used by small companies to raise funds. The implementation of this rule means investors exceeding a certain income may be approached for investments, but these investment offerings are unregulated and oftentimes are scams or very risky investments. |
Promissory Notes | Promissory notes are typically used by companies to raise money by selling a portion of their debt to an investor. You should always check with the Iowa Insurance Division whether the company is a legitimate company before investing in promissory notes. |
Self-directed IRA Fraud | Self-directed IRA fraud typically occurs when a scammer misrepresents the responsibilities of self-directed IRA custodians. Scammers may falsely suggest your investment is protected or that your self-directed IRA custodian will investigate the investment offer for you. |
For more information got to www.iowafraudfighters.gov