General Financial Fraud And Scam

The information and suggestions given in this section are designed to help you become an informed investor and can help you, your family and your community identify general fraud and scams.

Efficiency marketing and efficiency fraud: Affinity fraud means investment scams that make members of identifiable groups such as religious or ethnic communities, elderly or professional unions. Those who often promote intimacy scams, are members of the association or pretend to be. They often appoint a respected community or religious leaders from within the association to spread information about the scheme, and assure them that fraud investment is valid and meaningful. Investment always involves some extent risk. Reduce your risk by asking questions before purchasing and getting facts about any investment.

To avoid affinity fraud

Verify everything no matter how reliable the person who takes investment opportunity to your attention.
Never invest only on the basis of the recommendation of an organization or a member of a religious or ethnic group so that you are related.
Intensive investigation of investment and verify what you have been told about investment.
Keep in mind that even the person who tells you about the investment would not have investigated the investment.
Do not fall under the guise of such investment who promise great benefits or “guaranteed” returns. If an investment feels so good that it cannot be true, it is probably true. Similarly, beware of any investment that is said that there is no risk in it; No investment is risk-free.
Avoid any investment opportunity that is not presented in writing.
If you are asked to keep the investment opportunity confidential, then suspect.
Consult an indifferent third party (such as a lawyer or licensed financial planner or advisor) before signing anything.

“Ponzi” and “Pyramid” schemes: These investment are illegal. Many intimacy fraud scams include Ponzi or pyramid plans, which is used to pay the earlier investors to pay the new investor to make an illusion that investment is successful. This trick is used to cheat new investors to invest in the scheme and to assure existing investors that their investment is safe. In reality, the fraudster almost always steals the money of investors for personal use.

Both types of schemes depend on the endless supply of new investors – when the unavoidable phenomenon decreases, and the supply of investors is eliminated, the entire plan is destroyed and investors find out that most of their or the entire money is lost.

Doubt if…

Each new recruitment will have to invest in advance or buy a starter kit.
Need to buy more products than selling new recruitment.
Participants earn money on each new recruitment.
No customer is a refund policy.

“Free lunch” seminar: Senior citizens are often invited to seminars, which are given information about free food and investment opportunities, insurance products or will and trusts. Free food seminars are rarely about education. Their final goal is to recruit new customers and sell products. They can try to sell you inappropriate investment or persuade you to change your current investment. They cannot disclose their fees and commissions or other relevant information, making it difficult to compare the products and services. Worse is that some incidents are just a trick to get your personal and financial information.

Abuse of annuity: An annuity is a contract in which an insurance company makes you a series of payment at regular intervals in exchange for a premium. Scholars are often purchased for future retirement income. Since annuity is a complex contract, it is important to know whether it is suited to your position before signing the contract. For some people, annuity may be a suitable part of the overall financial plan. Consider your goals, as well as consider how much risk you are willing to take. Some annuities products levy high dedication fees. It is necessary for senior citizens in California to include revelations in relation to the dedication fee period in individual annuity contracts. Ask not only about the benefits, but also about the shortcomings. It is also helpful to talk to individuals who keep their interests in mind before taking decisions, such as financial planners and/or tax advisors.

Viastic and Life Settlement Investment: Two legal, but highly risky investments include incurable or elderly people who sell the death advantage of their life insurance policy at cash exemption. These people can accept cash to take a new life insurance policy in their name on the basis of their health and age.

The broker then sells shares to investors, so that the insured person can get a proportional part of the death benefit when he dies. These investments are often promoted as “guaranteed”, but it is not so. Investors are completely dependent on the broker’s company to find a policy, to receive ownership of death benefits, pay premiums, monitor the situation of the insured and pay investment.

The risk also increases due to the following reasons

The exact dates of death cannot be estimated.
All insurance policies remain disputed for two years after the release.
Policies may have been obtained from fraud, and all premiums should be paid or the policy has been canceled or the policy has been canceled.
Most companies have no proven track records to pay the premium or really pay on the date of investment.
Other investment proposals relating to anticipated cash unexpected benefits or future disposal (eg, insurance settlement, heritage, or lottery win) also indulge in similar high risk. If you have been approached and asked if you can be taken a policy, or you want to discuss any other insurance matter, contact the California Insurance Department.

Commodity fraud: Beware of any firm or individual who is offering you to sell options on commodity futures or commodities, including precious metals like silver or gold; Forex like euro or yen; Energy resources such as crude oil, heating oil, unleased gas; Or include agricultural products such as maize or soybean. Investing in goods is very risky and even experienced investors can lose their entire investment very quickly. Anyone who claims the opposite may have been breaking the law. Always ask for evidence and report fraud to the Department of California to the Oversite Department.

Promise note fraud: Some promissory comments may be legitimate investments, while others are fraud. The salesperson giving the promissory note should be registered with the department to sell securities. The promissory note is a form of loan that companies sometimes use loans to generate revenue. The company promises to return the buyer’s funds (principal) and pay fixed interest in exchange for borrowing money. Promise comments prescribe conditions or repayment periods from a few months to many years. Investors who consider purchasing promissory note should do intensive research on them. To verify it, contact the department whether the seller has a proper license or not, and whether he complies with California’s security laws.

Online Escro scam: Carefully evaluate online escrow sites before sign up for any service. Many of these are fake copy sites.

Avoid any Escro service that does not list any address or phone number on its website – this is a red flag.
Do not give personal or financial information on the Internet, unless it is through a safe website and you have started contact. The website address of safe sites at the end of “http” has “S”, which “https.” Most browser are displayed as displayed to indicate the paddlock icon that the website is safe.

Insented mortgages and frauds: There is a wide range of derogatory debt practices that affect borrowers with poor debt. Even consumers with good credit conditions may feel pressure to accept the proposed conditions or take the risk of losing the opportunity to buy the house they want very much. The derogatory mortgage loan practices may include these activities:

Repeated refinance, or loan “clipping”, resulting in the borrower to have very little or no economic benefit and is made with the primary purpose of generating additional loan fee, pre-paid penalty and fee from finance of debt-related products.
Refinance of special subsidized hostages resulted in loss of profitable loan conditions as a result.
Packing of funded amount and/or excessive and sometimes hidden fees in undeclared or excessive interest.
To reduce or repay your debt for borrowers using negative refinement – such as debt terms or structures – negative refinement.
Using balloon payments to hide the actual burden of financing and force borrowers to expensive refinance transactions or foreclosure.
Free or low cost for refinance (not spending from your pocket) prices. If it’s great to come true – then it’s not really a deal. The cost is included somewhere in the loan, possibly at a high interest rate.
Request requests to repair consumer line – Consumers are advised to talk to a credit consultant before taking this step.
Pressure consumers to sign a loan that they cannot bear or which they cannot understand.
Consumers persuade consumers to sign the loan agreements.

Contact the department to assist to file a complaint about a mortgage company or seller, or to determine the appropriate government agency to contact.

Report financial fraud and abuse: Do not prevent embarrassment or fear from reporting fraud or abuse. If you have any doubt about an investment, or you feel that you have been a victim of fraud, please report such concerns to the department immediately. Protect yourself and help others protect them from fraud!

Timesheer scam: Thugs are known for continuing a scam, which begins with the public records by gaining the identity of the timeter owners. They call the owners and claim that they have customers who are interested in buying their timeter, and suggests that the owners will have to pay the fee before the transaction starts. If the first fee is repaid, the second fee is sought and the scam continues until the timeter owner continues to pay. The use of fake California Escro companies has become part of this pitch. Scamsters use the names of inactive and active licensed escrow companies and then create fake websites by those names. The scamsters are using the names of those who were actually included in the really closed companies and are claiming to be legally licensed. Before proceeding forward, contact the California Department of Business Oversite to verify the escrow licensee and inform them about any suspicious thing.

Charity scam: Thugs often try to take advantage of the generosity of others, especially after a much -transmitted disaster like a storm or fire. Beware of any request from the charity institutions you do not already know, as well as the institutions you know. Verify that it is valid before sending checks to a charity or providing your credit card number.

Grandparents: In this scam, grandparents get a call from a fraudster who claims that they are relatives (usually as grandson), are in trouble and request to send immediate money. The fraudster describes various versions of emergency. His stories include traveling in another country, arrest, hospitalization, car accident and/or emergency car repair requirement. The fraudulent person feels upset and may be calling from a noisy place and claiming that he has only a few moments to talk. Sometimes another person is identified as a lawyer or arrest officer to add credibility to the story. The grandson asks the grandparents to send the money immediately and not to tell anyone. The scamster usually asks for several thousand dollars and can also ask to send more money or provide a bank account rooting number after several hours or days after several hours or days. Always verify the validity of the call before sending money to anyone! Once the money is sent, it is almost impossible to get it back.

Lottery and sweepstax scam: Scams often use valuable awards or reward promises to woo people to send money to people. The victims receive a letter, an email or text message that claims that they won foreign lottery or sweepstax. Scamsters ask the victims to receive their prize by sending personal checks, money orders or wire transfer to cover taxes, charges, shipping costs or insurance. It is illegal to play foreign lottery for an American resident. Any letter or email obtained from lottery or sweepstax in which you are asked to pay tax, fee, shipping or insurance to receive prizes, it is also illegal.

Foreign letter scam: If you receive a letter claiming to be from Nigeria or any other foreign government, foreign officer, widow or service member in which you are asked to send personal or bank account information, do not answer in any way. Doubt the persons representing themselves as foreign government officials seeking your help in keeping big money in foreign bank accounts. Do not believe in the promise of big money for your cooperation. Always keep your account information carefully.

Fishing Scam: Fishing is an email fraud method in which the criminal sends a valid -looking email in an attempt to gather personal and financial information from the recipients. Typically, messages seem to come from famous and reliable websites such as government institutions, banks and credit unions as well as many popular retraments-and even friends and family members.

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