Startling Financial Scams Emerge

Startling Financial Scams Emerged
Photo: Shutterstock

Startling facts about financial scams have emerged in a survey released Thursday by FINRA Investor Education Foundation, an independent regulator of securities companies in the U.S.

The survey, conducted on 2,000 respondents, revealed that 8 out of 10 have been exposed to various forms of financial scams.

”When it comes to financial fraud, America is a nation at risk,” said Gerri Walsh, FINRA Foundation President.

According to the survey, many Americans are unable to spot the warning signs of fraud from emails to cold calls promising unusually high return on investment.

Scammers are growing in sophistication and creativity, increasing their solicitation activities on individuals with higher income and education. They typically target men than women, especially the hapless elderly who invariably tends to lose money on scams.

Forty percent of respondents in the survey find the promise of more than 100 percent return on investment as enticing, making them a convenient prey.

Eleven percent fraud victims admitted they lost, “a significant amount of money.” The actual percentage is thought to be a lot higher since, in many instances, victims fail to report financial scam. Fraud that goes unreported encourages a swarm of other scams waiting on the wings to strike at the appropriate time with their insidious campaigns.

Financial scams masquerade as ubiquitous mainstream opportunities, hardly distinguishable from legitimate investment schemes and deceive thousands. FINRA reports the heavy toll of losses to an eye-popping $50 billion per annum.

Watch out for some of the common approaches:


Among their notorious tactics, con artists use email to offer transfer of an unbelievably huge amount of money for a transaction fee.

Alternatively, they would resort to another version like claiming to be a deposed Nigerian prince with millions of dollars and hurries to transfer the money to you in exchange for your bank account information.

Once they are in possession of your bank account information, they will use it to wipe off your account balance.

Winning the lottery

You always feel lucky then out of the blue somebody notifies you that you’ve won the lottery – without even buying a ticket. In order to claim your prize, you’re asked to pay a processing fee before the cash is transferred to your bank account.

Free meal

A classic tactic is giving complimentary lunch or dinner to the wary victims.

After a nice gesture that throws you off guard, they produce calculations for investments, which are too good to be true, promising to double your money schemes as an opportunity and so on in investment companies or securities that don’t exist. You’ll never see them again after taking your money.

Scammers are experts in looking for weakness in a person’s armor and offering easy money without doing any work. They’re adept at creating a false sense of urgency, appeal to desires and emotions of their prey, victimizing professionals noted for their constant grip on logic.

Fighting off scam is no easy task. For its part, FINRA espouses financial success in life by undertaking education campaign to underserved Americans.

Written by: Janet Grace Ortigas

Sources:  FINRA  CNNMoney

Leave a Reply

Your email address will not be published.