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Friday, Mar 07 2014 09:00 PM

ACTION LINE: How do I check out an investment opportunity?

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    By Contributed photo

    Blair Looney, president and CEO of Better Business Bureau of Central California.

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BY BLAIR LOONEY Contributing columnist

Dear Action Line, Through the years, I have been able to save money consistently for retirement. However, at this point in my life, I am not where I would like to be financially. I have recently been approached by some colleagues who are all planning on investing some of their savings with an investment professional who seems to be a little pushy and at times uses scare tactics to get them to commit.

While I do see the value and risk in investing, the sales pitch from the professional makes me feel uneasy. I want to be certain that I take the right steps before making the decision to invest. Can you offer any advice?

 

Dear Reader,  We all use persuasion tactics from time to time, but fraudsters clearly take it too far. You can outsmart fraudsters by learning to spot their common persuasion tactics. The pitches vary and continue to change, but the common tactics used stay the same.

Some of the common tactics used by fraudsters include enticing you with the prospect of wealth, claiming to be with a reputable firm, claiming that other savvy investors already invested, offering to do a small favor in return for a big favor, and creating a false sense of urgency.

Here are a few key steps to take before you consider investing:

* Check out the seller. A legitimate investment professional must be licensed. Before giving out your personal information, ask whether the seller is registered with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or your state securities regulator. For more information, call the free investor service number at 800-SEC-0330 or visit www.finra.org.

* Ask questions. Are you licensed to sell this investment to me? Is this investment registered with the SEC?

* Check out the investment. Check whether the investment itself is registered. Confirm whether a security is registered with the SEC and get access to a company's financial information by using the SEC's EDGAR Database.

The BBB has partnered with the FINRA to bring you up-to-date research and tools on investment fraud at www.bbb.org/smartinvesting.

To gain further information on how to outsmart investment fraud, join your BBB for a Smart Investing seminar. These seminars are designed to provide investors with the necessary tools and resources to make informed decisions and avoid scams that lure innocent victims into giving up their hard-earned money.

Register for our next upcoming seminar, March 19, by contacting Daniel at 559-256-6329 or daniel@cencal.bbb.org. Please RSVP for the Smart Investing seminar by March 12.

-- Blair Looney is president and CEO of the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 1601 H St., Suite 101, Bakersfield, CA 93301 or info@cencal.bbb.org.

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