What is the best advice an investor can follow to avoid investment fraud?
Ask questions – about the investment as well as the firm or company selling the investment. Start with the source, but also contact a state securities regulator or the U.S. Securities and Exchange Commission (SEC). 2.What is the difference between legitimate cold calling and a search for “quick hits”? Calls are considered “cold” when the caller attempts to sell an investment (or other product) to an individual with whom they have had no previous business, or personal, relationship. For many years, security industry professionals have used cold calling as a legitimate business practice for reaching new clients. But it is also a common approach employed by fraudsters. Legitimate users of this approach ask relevant questions about your financial situation and investment goals, whereas dishonest scammers may simply try to persuade you to purchase a “sure thing” investment with a high potential return. High-pressure sales techniques are used to encourage “quick hits” to buy the investment.
