Power Ideaz

By Pinaki Ghosh 
According to Peter Hildreth, New Hampshire’s Director of Securities Regulation and President of NASAA, “Today we have an ideal climate for fraud! Millions of new investors, many of whom expect unrealistically high returns, are looking for places to put their money. At the same time we’re living through an Internet-driven technology revolution that is a boon to investors and con artists alike.”
Eric Clark, the Secretary of State, Mississippi, has made a report on the top ten online investment scams in order to caution the internet users from the happenings.
According to Clark, “Securities fraud costs Americans billions of dollars each year; I know Mississippians just like me are investing for their retirement or their children’s education. But all of us need to be careful and watch out for these scams.”
The list has been worked upon by the North American Securities Administrators Association (NASAA).
The following is a list of the most spoken about Top Ten Scams, ranked in an order of seriousness or prevalence:
1) Internet fraud:
The scamsters or the frauds that log on to the web to “pump and dump” small stocks, peddle bogus offshore “prime bank” notes and perpetrate fraudulent pyramid schemes comprises of the first internet scam. Most of the states have certain programs that supervise the web for such fraud and conduct Internet “Surf Days.” The web world is like a city with good people and also bad people, and the people wanting to invest need to be a little extra careful about taking the advice from the people they do not know. Do not invest on the basis of a “tip” on the web without indulging in any independent research. You might not have the slightest hint about who’s offering you the not wanted help.

2) Investment seminars:
The people who invest must know about the seminars that are very costly and where the self proclaimed gurus imply that you can quickly get rich!
By luck, some people do tend to get rich. But if one may observe usually they’re the ones taking the seminars, making the money from the admission fees, and selling their books and audiotapes. An Idea that works to promote oneself! The seminars that are marketed through the media such as the newspapers, radios and TV ads and “infomercials” on cable television too have the capability to get some people in their favor. Just recently the promoters have started their own colloquium and tutorials that promise to turn the investors into a successful stock “day traders.” The day trading, more similar to gambling than investing, is inappropriate for the vast majority of investors.
3) Affinity group fraud:
The people from the closely knit religious, political or ethnic groups are often the target here. The frauds from the same religion, ethnicity or political orientation target them. The crooks that seek to misuse the natural trust of the common people like us. The targeted media advertising is used to recognize the people who can be easily fooled. Most often this works with the offers of employment or mere financial advice. To explain better take an example of the California’s Asian communities that have been wronged by scammers luring them in the foreign exchange investments which are bogus. Most typically the promoters steal the money and absolutely no reserves are made.
4) Abusive sales practices:
The entire State and other securities regulators have been working on and also report progress in the fight against “microcap” stock fraud by suspending, barring and criminally prosecuting brokers who specialize in the manipulation of low-priced securities. But none the less the investors need to be on a constant vigil and should hang up on cold callers.
5) Telemarketing fraud:
The new “boiler rooms” or the high-pressure telephone sales operations are unlocked most of the time, and they sell the illegal or the fraudulent investments. The advertisers try to make the most out of the headlines—from the fears over the Year 2000 problem to the Asian currency crisis or breakthroughs in computers or biotechnology. In one way the weak investors can try and protect themselves by using their telephone answering machine to screen their calls and not even answer solicitations by the much irritating salespeople.
6) Promissory notes:
The growing area of fraud and the notes that are supposedly “insured” and backed by real assets are better known as the promissory notes. In fact, they are backed only by often worthless promises to repay. They tend to give you the high interest rates also to the investors who may be trying hard to get the income from the money market funds or also the certificates of deposits. The investments are sold by the life insurance agents that are lured by the high commissions, and most of the times even they know nothing about the promoters also of the savings beyond what they have been told. Sometimes, the agents do not know much about what has been licensed as the security brokers with the state securities regulators to sell these notes. In most of the cases, the notes must be recorded with the regulators. The multi-state investigations which also have been exposed to a number of the promoters of these notes state that there have had problems with the regulators of the past. Most notes that are questioned are on the behalf of companies which do not even exist. In any case if the companies are legal, investors should realize that the reason these notes are being offered directly to small investors is because banks and venture capitalists have refused to invest in the companies.
7) Viatical investment scams:
The most wanted and the hottest new investment product and at the same time extremely risky, “viatical contracts” are usually the interests in the death benefits of terminally ill patients such as AIDS and cancer victims. The patient who is insured gets a percentage of the death benefit in cash, supposedly to improve the quality of their lives in the last days. The investors get a part of the entire amount of the death benefit when the insured succumbs into his ailment; this is only once a fee is paid off to the viatical investment broker. Because of such reservations in stating as a terminally ill person would die, these investments must be considered extremely exclusive.
8) Entertainment fraud:
The con artists or the frauds zero down on the investors hoping to hit it on a big by purchasing a piece of the next big ship like “Titanic.” Leaving aside the movies and investment vehicles include the cable television shows, video games and other such entertainment products.
9) Ponzi/pyramid schemes:
Almost always in style, these cheat by promise on high rates of return to the investors, but the only people making a profit are the advertisers which send them in motion, at the expense and out of funds from later investors, and those who end up losing their money when the house of cards inevitably caves in.
Illegal franchise offerings:
The State that has now taken the strict action relating to the inadequate information and fraud involving franchise investments, often marketed at business opportunity and franchise trade shows where promoters target people attracted by the prospect of owning their own business.

This entry was posted on Thursday, January 8th, 2009 at 11:48 pm and is filed under Business Tips, Hacking, Internet Marketing, Making Money on the Internet, News, Small Business, Uncategorized, Woman Entrepreneur, customer service. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.