Free Fraud FAQs | Free Fraud Legal Documents

How Can I Avoid Being A Victim?

Tue, 29 May 2007 21:19:00 GMT

Be very cautious if someone you know tells you they made a lot of money quickly from an investment. Many times the fraudster has paid this person a lot of money, so he or she will tell a lot of other people about the "opportunity" and get them to invest. Your friend or associate may not even know he or she is involved in a scam.
Be very suspicious if someone tells you that an investment "has no risk." All investments have risks, so ask for a business plan, prospectus or other document that outlines the risks and instructs you on how to get your money out. If the person can't produce anything like that, don't invest.
Contact your local Attorney General's Office or your state securities agency and ask them questions about the investment you planning to make. Ask about the salesperson who is promoting this "investment opportunity" and about the company he or she is representing, including whether or not the company is licensed to sell in your state and whether or not the investment is properly registered to be sold to consumers in your state. If the investment company and/or sales person are not registered, don't invest.
Don't be pressured into investing before you have a chance to investigate the "opportunity." Just because someone you know made money, or claims to have made money, doesn't mean you will too.
Watch out for investments that are heralded as "onceinalifetime opportunities," especially when the person promoting it says the recommendation is based on "inside" or "confidential" information.
Contact the North American Securities Administrators Association (NASAA), the oldest organization devoted to investor protection, tollfree at 188884NASAA. They will give you more information about investments and advise you on how to protect yourself from scams.

What If I Suspect Affinity Fraud?

Tue, 29 May 2007 21:19:00 GMT

Print out a complaint form (http://www.sec.gov/complaint/selectconduct.shtml) or write a letter to the U.S. Securities and Exchange Commission (SEC) at: SEC Complaint Center 450 Fifth Street, NW Washington, D.C. 205490213 Fax: 2029429634
Or, fill out their online complaint form at http://www.sec.gov/complaint/selectconduct.shtml Complaints are best handled if the information provided is as accurate and complete as possible. Your complaint should include:
- Your name, mail and email addresses, and telephone numbers.
- The name, mail and email addresses, telephone numbers, and website address of any individual or company you mention in the complaint.
- Specific details of how, why, and when you were defrauded or encountered problems with investments or your broker or adviser.
Each complaint is thoroughly reviewed and passed to the appropriate SEC office. The Office of Investor Education and Assistance will handle certain general questions about the securities laws and complaints relating to financial professionals or a complainant's personal financial matters. Attorneys in the Division of Enforcement evaluate complaints implicating violations of the federal securities laws. It is the general policy of the SEC to conduct its investigations on a confidential basis to preserve the integrity of its investigative process as well as to protect persons against whom unfounded charges may be made or where the SEC determines that enforcement action is not necessary or appropriate.

This is general information about affinity fraud and steps you can take to minimize your chances of being enticed into fraudulent investment schemes, but it is not a substitute for qualified legal counsel. Consult with a qualified securities attorney if you need legal information about affinity fraud or any other securitiesrelated issue.

What Is Affinity Fraud?

Tue, 29 May 2007 21:19:00 GMT

Many people are aware that identity theft is a crime that is growing at an alarming rate. But they are not aware of another crime that's growing at an even faster rate: affinity fraud. Affinity fraud targets members of identifiable groups, including religious, ethnic, senior, professional and other groups that have members with common interests, background or other factors in common. Affinity fraudsters take advantage of the familiarity among group members to entice them into putting their money into investment scams. Typically, the fraudsters who promote affinity scams are group members, claim to be group members, or enlist respected leaders within a group to spread the word about an investment "opportunity." Fraudsters are also using the Internet as a convenient vehicle to target groups with email spams.

What Is Employed In Affinity Fraud Scams?

Tue, 29 May 2007 21:19:00 GMT

Many times "Ponzi" or pyramid schemes are employed in affinity fraud scams where money invested by new investors is used to make payments to earlier investors, which gives the earlier investors the false impression that their investments are successful. This illusion of success tricks new investors into investing in the scheme, and lulls earlier investors into a false sense of security about their investments while the fraudster is actually stealing the money. Both types of schemes depend on a steady stream of new investors. Then, the inevitable occurs the supply of investors dries up, the pyramid collapses and investors lose most, if not all, of their money. Because of the tightknit structure of many groups, regulators and law enforcement officials find it very difficult to detect an affinity scam. Victims of these scams often do not notify the authorities or assert their legal rights, because they are uncomfortable with the idea of getting "one of their own" in trouble with the police. Instead, they try to deal with the wrongdoer within the group, which keeps the information from getting out and helping other people avoid being scammed.

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