Jan 27, 2009 6:32 pm US/Eastern
How To Avoid Being Ripped Off In A Ponzi Scheme
NEW YORK (CBS) ―
-
-
The latest alleged Ponzi scheme discovered on Long Island has raised fears among many about whether their money is safe and how to know who can be trusted.
AP
The latest alleged Ponzi scheme discovered on Long Island has raised fears among many about whether their money is safe and how to know who can be trusted.
Agape World Investments worked like a typical Ponzi scheme. Many of the victims were colleagues who trusted their co-worker's recommendation.
So before handing over your hard earned cash:
Make sure the financial advisor is legit. You'll want to check with national organizations that issue credentials like the Association of Personal Financial Advisors or the Certified Financial Board of Standards.
Second, understand the difference between a money manager and a custodian. A custodian is in possession of your account. A money manager executes the transactions. Frauds occur most when those two things are put together.
Finally, make sure you keep diligent records. Be wary of "off the chart" return promises and make sure you understand the process by which the investment makes money.
If you can't understand how it works, you shouldn't be in it.
The FBI has also created a page explaining how to identify a Ponzi scheme and how to avoid being scammed by one.
Click here to see it.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
2009 Celebrity Deaths
Click to enlarge
Stumble It!
Reporting
Comments