NCJ Number
132967
Journal
Consumers' Research Volume: 72 Issue: 1 Dated: (January 1989) Pages: 10-12,35
Date Published
1989
Length
4 pages
Annotation
The Federal Trade Commission estimates that consumers lose nearly $1 billion annually in fraudulent investments.
Abstract
Consumers often get back less than 10 cents for every dollar fraudulently invested because companies engaged in fraud often operate a particular scam for a short period of time, spend the money they take in quickly, and close down before they can be detected. Investment frauds are sold in a variety of ways such as print, television advertising, and telephone. Typical investments sold by fraudulent operators include coins, gemstones, oil and gas leases, interests in oil wells, applications for cellular telephone licenses, precious metals such as gold and silver, and strategic metals used in defense or high-tech industries. Fraudulent companies often choose to sell investments about which most consumers are not well-informed. Because it is so difficult to recover money paid to fraudulent sellers, the best thing consumers can do is refuse to give them money in the first place. Guidelines to help consumers evaluate investment offers are offered, and sources of information on companies and individuals who sell investment opportunities are listed.