Investment scams come in all shapes and sizes

June 17, 2024 – Our town took a magical trip down memory lane today. The Model T Ford Club of America rolled into town for their 2024 National Tour. 

Dozens of these magnificent Model T’s lined our streets. It felt like stepping back in time.

The visitors took a stroll through our town’s rich history, from the old Lakeside Inn, the Auto Speedway route, made famous by racing legend Barney Oldfield, to our charming historic buildings and homes.

The Lakeside Historical Society opened their doors, welcoming everyone to explore the chapel, museum, Gift Shop, and the Speedway monument. It was a little slice of the past brought back to life.

Their visit was short, but the memories will last a lifetime. A huge thank you to the Model T Ford Club of America for stopping by and making the day in our hometown so special.

by Sheryl Reichert

SherylReichert, President and CEO of the Better Business Bureau of San Diego and Imperial Counties.

Sheryl Reichert, President and CEO of the Better Business Bureau of San Diego and Imperial Counties.

Consumer financial fraud is a serious problem. Phony investments can empty seniors’ pockets faster than any high‑flying fraud. When someone gets marked as bait, the types of investment and financial scams will be varied. Typically, fraudsters will claim they can turn a small investment into large profits within a short period of time. Here are a few of the more popular “get-rich-quick” investment scams.

— Pyramid schemes: These cons rely on increasing numbers of unsuspecting investors buying into the hierarchy at the beginning, hoping to collect from those who join at a later time. The hoax is so appealing because a few people actually make money. However, when no new participants can be recruited, the entire scheme implodes and collapses.

— Pump-and-dump: A fraudster will deliberately buy shares of a low-priced stock of a thinly traded company and then spread false information to drum up interest in the stock and increase its stock price. Eventually, the fraudster will dump his shares at the higher price and then vanish, leaving many people caught with worthless shares.

— Advance fee fraud: This scam will begin with an offer to pay you an enticingly high price for worthless stock. It sounds like a great deal. However, in order to play, you are required to pay and send a transaction fee in advance for processing and handling. Then, as time passes, the victim realizes they’ll never see any money from the deal.

— Affinity fraud: Fraudsters will use groups of friends, colleagues, religious groups, ethnic groups or other people who inherently trust one another to build support for the next “great investment.” We would all like to think that we could spot a scam easily, but con artists often are very friendly and nice people. They look professional and appear successful and they are not always strangers. With affinity fraud, the investment turns out to be a fraud and leaves a bitter trail of broken relationships and empty bank accounts.

To avoid becoming a victim, the BBB recommends to be on the lookout for such red flags as guarantees, unregistered products, reports of unusually high yielding returns, complex strategies, missing documentation, account discrepancies or a pushy salesperson.

Make sure you’re dealing with a licensed and registered professional and firm. Ask questions and get the answers you need. Seek independent advice or see a trusted adviser if there’s something you don’t understand. Take notes during conversations with sales people and get promises in writing. Never accept a verbal agreement. And, never sign a document before reading it carefully.

Even at their best, some investments are volatile and come with high risk. Don’t invest money that you can’t afford to lose.

For additional consumer protection information, visit www.bbb.org or contact the Better Business Bureau (BBB) by phoning (858) 637-6199 during regular business hours. Or, call the BBB’s 24-hour Consumer Helpline at (858) 496-2131 or 1-800-600-7050 to obtain free information on local companies along with a list of BBB accredited businesses in a particular type of industry.

Sheryl Reichert is president and CEO of the Better Business Bureau of San Diego and Imperial Counties.