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Online Investment
Opportunities
Be
careful investing online, and don't get taken by cyber-scams.
Washington, DC - When it
comes to investment opportunities on the World Wide Web, keep a
watchful eye. The Web has many legitimate investment opportunities,
but it also plays host to some unscrupulous players. Unfortunately for
potential investors, sometimes it's tough to tell the difference.
Some fraudulent
investment promoters fool visitors through web sites that make their
"investment company" look like a solid, top-rated Wall
Street investment firm. Other fly-by-night companies can feature
slick-looking web sites that use graphics, audio and even video clips.
Still others pique your curiosity with messages on Usenet groups that
promise big profits and direct you to call or e-mail for more
information. When you respond, you'll hear:
•offers of a
"ground floor opportunity" for you to realize a better
return on the investment than any other you're involved in
•guarantees of big
profits in a short time
•claims that minimize
or mask the risk involved
•lots of pressure to
act now because the "market is moving."
Before you respond to
any online investment opportunities, the Federal Trade Commission says
to look for these signs of a company that may not be on the up-and-up:
•"THIS INVESTMENT
IS IRA APPROVED": Some online investment opportunities may claim
that their investment has been "approved" for your IRA.
Don't believe it. The IRS does not "approve" investments for
IRAs.
•"OUR WEB SITE
WILL MATCH YOU WITH INVESTMENT OPPORTUNITIES":
"Matchmaker" web sites offer to find investment
opportunities that appeal to your unique interests. Ask questions. Get
satisfactory answers. Do the operators of the web site disclose their
identities and affiliations, if any, with the investments they're
touting? Do they insist on their fee before they allow you to view
their list of offerings? Who are you dealing with? Get detailed
information about the company, be wary of any up-front fees, and keep
your bank account information to yourself.
•"OFFSHORE
INVESTMENTS ARE TAX-FREE AND CONFIDENTIAL": When the company
behind the web site claims to be located offshore or offers an
"offshore, tax-free" investment, get a second opinion from
someone you trust - your attorney, financial advisor, or accountant -
who is knowledgeable about the tax implications of
"offshore" investments.
•"SUBMIT YOUR
FINANCIAL INFORMATION ONLINE": Some web sites may ask you to
submit personal financial information online to determine whether
you're an "accredited investor." In addition to your name
and e-mail address, you may be asked for your income level, bank
account information, Social Security Number and other personal
information. Sometimes, this is a ploy to develop a "lead
list" of potential investors. In any case, be very careful before
you submit any personal information online. Before you do, visit the
site's privacy policy. It should tell you what personal information
the site collects and how the information is used.
For more information
about investing on the Internet contact the following organizations:
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue,
NW
Washington, DC 20580
202-FTC-HELP (382-4357)
202-326-2502 (TDD)
North American
Securities Administrators Association, Inc.
10 G Street, NE
Suite 701
Washington, DC 20002
202-737-0900
Commodity Futures
Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
202-418-5000
National Association of
Securities Dealers
1735 K Street, NW
Washington, DC
20006-1500
202-728-8000
Securities and Exchange
Commission
450 Fifth Street, NW
Washington, DC 20549
202-942-7040
National Association of
Investors Corporation
PO Box 220
Royal Oak, MI 48068
248-583-6242
Employee Benefit
Research Institute
The Motley Fool
Alliance for Investor
Education
The Online Investor
invest-o-rama
Pathfinder.com
Fortune.com
Money.com
National Fraud
Information Center
Small Business
Administration
American Savings
Education Council
InvestorGuide
InvestorWords
fination.com
You can file a complaint
with the FTC by contacting the Consumer Response Center by phone:
toll-free 1-877-FTC-HELP (382-4357); TDD: 202-326-2502; by mail:
Consumer Response Center, Federal Trade Commission, 600 Pennsylvania
Ave, NW, Washington, DC 20580; or through the Internet, using the
online complaint form. Although the Commission cannot resolve
individual problems for consumers, it can act against a company if it
sees a pattern of possible law violations.
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