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Steering clear of financial scams

untruthfulman34487693.jpgFinancial scams can be very devastating for people who fall for them because they can lose all of their savings. No matter how much money you lose in a financial scam it still hurts. The best thing that you can do is to learn how to steer clear of financial scams so that you do not become a victim.

The first thing that you need to do is find out about the broker or financial advisor that you are dealing with. If you are not familiar with the broker or advisor, it is very easy for them to take advantage of you. The reason that it is so important to find out about the broker that you are dealing with is because of Ponzi schemes, which every year more and more investors become victims of. What you need to realize is that it is very easy to lose your money, so if you take a few precautionary steps you can greatly reduce the risk of that happening to you.

The first thing that you will want to do when finding out about the advisor or broker you are considering investing with is to check with the Financial Industry Regulatory Authority. You can find this group on the internet by visiting the website www.finra.org. Once you are at the website you will want to click on Investors and then select FINRA BrokerCheck. In this search, you can look up the securities firm that they work for, but you can also look up the individual name of the broker that you are thinking of investing with. It is always a good idea to check both the securities firm and the individual broker because you never know what you might find, the broker might be clean, but the securities firm might have a questionable past or even be involved in an investigation for a potential financial scam.

Something else to keep in mind is that even if the person you are thinking of investing with is not a broker you can still use the BrokerCheck site. You want to check this site no matter what because the persona might have been a broker before, but lost their license due to financial scams. Once you have found the information on the broker or the securities firm you don't want to just limit yourself to the information that has popped up on your screen, you will want to view the full report. The full report is in PDF form, so you will have to have Adobe Reader to view the report, if you don't have the program you can always download it for free from the internet.

The next thing that you will want to do is talk to your state regulators. They will be able to provide you with even more information about a particular broker or securities firm. It is important that you talk with them in addition to doing the BrokerCheck because the FINRA website does not provide any information on an investor once they have no longer been registered and active with a broker-dealer for two years. You might want to check with a few other states as well because financial scam artists like to move around a lot.

Something else that you need to do is make sure that the seller is registered to sell the product and that the investment product is registered. If nothing is registered this should be a huge red flag because most financial scams involve an unregistered persona selling an unregistered security. To find out if the person and the security is registered all you have to do is place a call to your state's securities regulator.

Finally, you will want to pay attention to the details. If the person is not providing you with any documents about the security that you are investing in that should be enough to alert you. You also want to pay attention to the statements that you are receiving because sometimes those can change and that can signal that something is not quite right.

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