Unfortunately, too many seniors across the United States fall victim to investment fraud. It is a growing trend we see here in Hawai‘i where criminals are targeting our seniors. To protect yourself, family and other loved ones, Hawai‘i’s BBB provides a few sound tips on how to spot the red flags and avoid investment fraud.

Red Flags For Fraud And Persuasion Tactics

How do successful, financially intelligent people fall prey to investment fraud? Researchers have found that investment fraudsters hit their targets with an array of persuasion techniques that are tailored to the victim’s mental profile.

No such thing as a “Guaranteed Return”: Every investment carries a certain degree of risk. Safe investments generally yield very low returns. Most con-artists spend a lot of time trying to convince investors that extremely high returns
are guaranteed, don’t believe it!

Reciprocity: Scammers often try to entice investors through free investment seminars; they hope that by doing a small favor for you, such as a free lunch, you will invest in their pitch. There is never a reason to make a quick decision on
an investment. If you attend a free seminar, take the material home and research it.

Pressure to invest right now: Scammers often tell their victims that this is a once in a lifetime offer and it they won’t see it again. It is important to resist the pressure to invest immediately and take the necessary time to investigate before
committing your hard earned money.

What You Can Do to Avoid Investment Fraud

Ask questions: Scammers are counting on you not to investigate before you invest. It is imperative that you take the time to do your own independent research.

Research before you invest: Unsolicited emails, fliers and company investment letters should never be used as the only basis for your investment decisions. Understand a company’s business and its products or services before investing.

Know the salesperson: Take the time to check out the person offering the investment before you invest — even if you know the person. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out brokers and their licensing for free with FINRA’s database and call Hawai‘i’s BBB for information on any firm they work for.

During 2013, Hawai‘i’s BBB, in conjunction with FINRA, will be educating the public on investment fraud. If you have any questions or would like someone from our office to speak with your group, give us a call at 808.536.6956.


Better Business Bureau, Hawai‘i
808-536-6956 | 877-222-6551 Neighbor Islands