Be vigilant this Christmas, Fraudsters are out there! 10 ways to tell if you’re being scammed

Many of us are looking to get cash quickly this Christmas, seeking out the best deals with great returns; or you may be looking forward to that end-of-year bonus and want to place your money, in investment instruments which you believe will help achieve your life-long goals. However in our quest to find great investment opportunities for our money, some of us tend to fall victim to fraudulent investment schemes.

The Trinidad and Tobago Securities and Exchange Commission (TTSEC) was established to regulate the securities industry and help investors and potential investors like you, make wise investment choices. We want you to exercise your due diligence by being aware of some of the tricks that fraudsters may try on you.

Here are some key phrases you can look out for:

1. “This investment is guaranteed.”

Investing and trading in stocks always have an element of risk and this is partly because stock market values fluctuate based on market conditions. Always remember: if it seems too good to be true, then it probably is.

2. “I am offering you double the returns that you can get anywhere else.”

Fraudsters always make their scam sound more attractive than what you can get legitimately.  Don’t be fooled by the promise of quick and easy money or high returns.

3. “You know, not many people know about this deal. Now is a great time to trade and make money.”

Be careful that you do not get involved in insider trading.  If persons trade on information that is not yet public, they may be guilty of an offence that could earn them fines of TT$10 million and imprisonment for 10 years, upon conviction.

4. “Other smart people like you have already joined and are making a fortune.”

Fraudsters seek to make you more comfortable with the deal by adding that others “like you” are already involved. This is known as the “herd mentality.”  They are the shepherds, don’t become the sheep.

5. “This deal is going fast and will not be around for long. You must act soon! ”

Never be rushed into an offer and always be on your guard against anyone trying to push you into a deal. Acting quickly or in a panic, so as not to lose “a deal”, is a sure way to make you overlook the important details of an investment opportunity. Those details are what you may need to clarify to ensure as much as possible, that there are no potential problems.

6. “Just make the cheque out to me. It’s a lot easier that way.”

A cheque made out to an individual rather than to a firm is more likely to be misappropriated. Even so, verify the bona fides of any company with which you are doing business first, before making a payment.

7. “Believe me, with my educational qualifications, my vast knowledge of the industry and my track record, I will never sell something that isn’t a winner.”

Try to differentiate between a sales pitch with its resultant exaggeration and valid skills. Check multiple references before making your decision. Remember titles, background, and past performance are no guarantee of honesty or the performance of the product. Take the time to seek independent legal or financial advice before making a decision. Always check the credentials of the company you’re dealing with.

8. “I’ll give you a special deal of half off my normal commission if you invest today.”

He says that line to all his targets. Anytime a seller offers you a discount, be assured that he can go much lower with his sales price, because the principles of business dictate that he will never sell at a loss. Don’t let a low price prevent you from doing your due diligence.

9. “I’m sorry, but it doesn’t take a rocket scientist to understand this.”

Freely dispensing jargon throughout their sales pitch is designed to keep you confused. This helps fraudsters make you feel inferior and thus, you are conditioned to trust their supposedly superior knowledge.

10. “This is available only to a special group of lucky people, and I’ve decided to include you.”

We all like to feel special. Appealing to this trait as well as the promise of easy money, makes many persons feel as though they have hit the jackpot. This reduces the willingness to question the deal.

The Trinidad and Tobago Securities and Exchange Commission (TTSEC) is not an investment adviser nor is it a brokerage house. This article is intended solely to provide you with the information you need to make sound investment decisions and to ensure that you are familiar with and understand your rights and responsibilities as a consumer of financial services.

For more information on identifying a fraudster visit https://www.investucatett.com . To report an investment scam please contact 624-2991. We welcome your questions, comments and feedback, or send us an email: ccei@ttsec.org.tt.