How to spot a financial fraudster
SEATTLE -- Con artists promise you the impossible, but they make you believe it. That's their job, they're professional swindlers.
But if you're careful and do your homework, you can often spot a financial fraudster before you hand over your hard-earned money.
We asked fraud fighter John Gannon how these appeals work.
"They're advocating an investment with a ridiculously high return," Gannon said.
He says people fall for it because, "it's the promise of high return and you see it time and time again being used. People basically put blinders on when they see a high return and they don't look for the red flags that may surround that high return."
And how do you spot that conman?
"You need to understand that the fraudster is playing on your emotions," said Gannon, who officially works for the Financial Industry Regulatory Authority. "They're using a number of psychological tactics to convince you to make a quick emotional decision without using the logical side of your brain to weigh the pros and cons in that investment."
Gannon says anything can be faked: clothing, brochures, Web sites - even portfolios.
"I could be a felon and be wearing a nice suit and pass off as an investment professional," Gannon said.
Gannon says you must understand how your money is being invested. That was the key mistake made by people scammed by convicted swindler Bernie Madoff.
"They gave him millions and millions of dollars and had no clue what they were investing in," Gannon said. "You should never invest if you don't understand the investment. And if your investment professional can't explain an investment, you should walk away."
His advice: Check out anyone you plan to use to invest your money. You want to make sure they are licensed and the product they are selling is registered. It should take you no more than 15 minutes to do that.
More information at www.finra.org
But if you're careful and do your homework, you can often spot a financial fraudster before you hand over your hard-earned money.
We asked fraud fighter John Gannon how these appeals work.
"They're advocating an investment with a ridiculously high return," Gannon said.
He says people fall for it because, "it's the promise of high return and you see it time and time again being used. People basically put blinders on when they see a high return and they don't look for the red flags that may surround that high return."
And how do you spot that conman?
"You need to understand that the fraudster is playing on your emotions," said Gannon, who officially works for the Financial Industry Regulatory Authority. "They're using a number of psychological tactics to convince you to make a quick emotional decision without using the logical side of your brain to weigh the pros and cons in that investment."
Gannon says anything can be faked: clothing, brochures, Web sites - even portfolios.
"I could be a felon and be wearing a nice suit and pass off as an investment professional," Gannon said.
Gannon says you must understand how your money is being invested. That was the key mistake made by people scammed by convicted swindler Bernie Madoff.
"They gave him millions and millions of dollars and had no clue what they were investing in," Gannon said. "You should never invest if you don't understand the investment. And if your investment professional can't explain an investment, you should walk away."
His advice: Check out anyone you plan to use to invest your money. You want to make sure they are licensed and the product they are selling is registered. It should take you no more than 15 minutes to do that.
More information at www.finra.org