Last Updated: July 1, 2010
Financial predators are on the prowl. So how can you protect yourself from scam artists?
Regardless of race, age, income level or net worth, anyone may become a target of fraud, according to the National Endowment for Financial Education (NEFE), a nonprofit foundation dedicated to helping all Americans acquire the knowledge and skills necessary to take control of their financial destiny. But, that does not mean you have to become a victim. NEFE offers the following tips as protection against financial scams:
- Thoroughly research any person, organization or company that provides you with financial planning or investment advice, or sells products or services. Work only with those who have reputable credentials. Get a second or third objective opinion on every important decision you make regarding your retirement investments and savings.
- Prevent identity theft by paying close attention to your credit report and checking for inaccuracies. You can order a detailed summary from the three major credit reporting agencies—Equifax, Experian and TransUnion — by visiting www.AnnualCreditReport.com. However, it is wise to stagger ordering reports from each agency every few months.
- Never give out your personal information — especially your Social Security number, bank account or other private data — to any person or organization you don't know. Even a financial institution that you work with will not contact you asking for this information.
- Put your name on the "do not call" list, and discontinue any conversation where you are pressured or threatened about an investment, financial service or product. The National Do Not Call Registry offers registration for consumers to stop telemarketers from calling. Learn more at www.DoNotCall.gov.
- Stop junk mail and credit card offers from being delivered to your home. You can stop most solicitations by calling 888.5OPT.OUT (888.567.8688), or visiting www.OptOutPreScreen.com. Have a shredder on hand so you can destroy any credit card offers or other material that could be used by someone pretending to be you.
- Don't give someone money in exchange for a promise to get money. Never spend money to become eligible to win something.
- Assume that any get-rich-quick opportunity is fraudulent.
- Know your specific risk tolerance — what you can and cannot afford to lose. Discuss your goals with any financial planner or adviser you work with and get all expectations in writing.