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How to protect yourself from investment scams and fraud

Posted on by DS

Investment fraud is on the rise according to the U.S. Justice Department.  Middle-class Americans, the elderly, and Christians are big targets. Here’s what you need to know to protect yourself from investment scams and fraud.

What comes to mind when you hear the words investment fraud?  I used to think of the super-wealthy people who invested millions of dollars in funds managed by big-time conmen like Bernie Madoff.

Not any more.

From now on, I’ll think of a retired Christian couple from Ohio whom I recently met.  They lost most of their modest, hard-earned retirement savings to investment advisers in Colorado who defrauded them.

They hosted me in their home when I spoke at their church.  As they prepared our Sunday dinner, I asked them about the RV I saw in their backyard, and how often they liked to go camping.

They replied that they camp a couple of times a year.  Then the 70-something year old husband said, “It’s about all we can do now since our retirement accounts were embezzled.”

I didn’t really feel it was appropriate to ask them to explain the entire situation, but I learned that they thought they had invested their funds with a reputable investment firm based in Colorado.  But they were notified by the feds that the firm was a sham, and their money was gone.

Their funds were never recovered, and to add insult to injury, the scammers got just a couple of years in prison and a fine of a couple of hundred dollars.

What is Investment Fraud?

Investment fraud, also known as securities fraud or stock fraud, is a deception that induces investors to buy or sell securities like stocks, bonds, stock options, mutual fund shares, commodities, and futures on the basis of false information, frequently resulting in losses.

There are several types of investment fraud.  Here are some of the more common ones:

Pyramid Schemes

Pyramid schemes are purported investment opportunities that promise profits based on the investor’s ability to recruit other individuals to join the program — as opposed to profits based on actual sales or investment results. Eventually, the scheme gets too big and collapses because the fraudster becomes unable to pay everyone on the top of the pyramid.

Ponzi Schemes

Ponzi schemes operate on the same “rob Peter to pay Paul” principle like pyramid schemes, where money from new investors are used to pay off earlier investors. The difference is that the victims typically don’t know how their money will supposedly be invested and bring a return. Bernie Madoff is the most famous Ponzi scheme fraudster to date, bilking upwards of $50 billion from investors.

Pump and Dump

This is a fraud where a promoter makes false positive statements about a stock he or she owns, often using several lines of communication like press releases, bulletin boards, chat rooms, etc. After this “pump” of his stock, the promoter then sells his or her own shares for a profit — the “dump.”

How Big a Problem is Investment Fraud?

Investment fraud has been on the rise in recent years due to the bad economy, according to the Department of Justice. One sign of that is that many perpetrators are accused of using proceeds for their personal expenses such as mortgage payments, home furnishings and school tuition bills, instead of luxuries like fancy cars, boats and vacations. Loan companies in North Carolina (Bad Credit Accepted).
Over the last two years, the federal government prosecuted 500 investment fraud cases that targeted 800 defendants and involved more than $20 billion in fraud.

‘‘We see it as a growing problem. We see it as a serious problem,’’ according to Connecticut U.S. Attorney David Fein in an interview with Boston.com. As a result, the DOJ has begun to host regional investor summits across the country this fall to warn investors about these scams.

How are Victims of Investment Fraud Targeted?

The victims of investment fraud are typically middle-class Americans.  The elderly and Christians or others with religious affiliation, are increasingly being targeted in something the government calls “affinity fraud.”

According to the SEC, “Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups.” The fraudsters who promote affinity scams frequently are, or pretend to be, members of the group and they exploit the trust and friendship that exists.

Sadly, many Christians fall for these scams because we want to believe we can trust others who call themselves Christians and we let our guard down regarding a deal that might sound too good to be true.

Also, if someone appears to be a successful financial investor, it may look to us like God is “blessing” them with success and high rates of return . . . . So why wouldn’t we want to get in on that blessing from God too?

How to Protect Yourself from Investment Fraud

I asked one of my mentors, who is an extremely successful financial advisor and a Christian, for some tips on how people can best protect themselves from investment fraud. Here are a few of his recommendations:

1. Check Out Everything

Today it is easier than ever to check out financial advisors and investments. The first thing you should do is Google the advisor and the products they sell or promote. Then check to see if they are registered with the SEC and FINRA and if any complaints have been filed against them.

2. Invest Only with a Reputable Third-Party Company (i.e. USALoansDB)

Don’t give your money to someone who says they’re going to manage and invest it within their own funds or accounts. Insist that it be managed and invested in a custodian account that is in your name and held by a reputable brokerage. Be sure you receive investment statements directly from that brokerage each quarter.

3. Don’t Fall for the Promise of Spectacular Profits or “Guaranteed Returns”

You’ve heard it before but it bears repeating: If it sounds too good to be true, it probably is. While many fraudsters make big promises that raise red flags in your mind, some promote only slow and steady growth.  So always be on your guard.

4. Make Sure Everything is in Writing

Be suspicious of any investment opportunity that is not in writing. If someone tells you they don’t have time to put it in writing, or that you must kept it a secret, that’s probably a good sign that you should stay away.

5. Take Your Time

Don’t feel pressured or rushed into buying anything. Be skeptical of “once in a lifetime” opportunities, especially if it is based on “inside” or confidential information.

How to create a fantastic yet frugal Christmas gifting strategy

Posted on by DS

Christmas time reminds me of how many people I know and how many people bless my life.

Culturally, Christmas is one of the times that we are to acknowledge the important roles that others play in our lives.  We do this by giving them a gift.  However, for most of us, our list of people who we should buy Christmas gifts for continues to grow, but the amount of money that we’ve decided to spend on Christmas remains the same.

Long Christmas lists and a limited budget often leads to an enormous amount of stress.

But it doesn’t have to be such a financially stressful event.

A Step-by-Step Guide to Creating a Frugal Christmas List that Blesses Others

1. Set your Christmas budget.

How much will you choose to spend on Christmas gifts this year?  The first step here is to decide on something that fits within your budget.  You don’t want to enjoy Christmas in December and pay for it (literally) till the summer.  Don’t be ashamed if you can’t afford much for Christmas.  Set your limits.

2. Write a list of everyone to whom you wish you could give a gift.

Pretend that time and money were no factor.  Yes, it will probably be a long list, but that’s okay.

3. Classify each person on your Christmas list.

Here are some possible ways you can classify each person:

  • Email or e-card – This would be people that you want to take five minutes out of your day to send them a heartfelt thank you for the ways they’ve blessed you.
  • Mail a card – For a relatively low price, you should be able to get a family picture to send, create a newsletter, and print it up at home.  Because the ‘acceptability’ of emails is changing, some people still like the personal touch of a card in the mail.
  • No cost or low cost gift – Items included in this category would be homemade gifts and other craft type items.  These may require a little more of your time, but they are personalized, low cost, or free gifts.
  • Gift card – There might be some people you interact with that the most appropriate thing to do is to get them a gift card.  There are several places online to buy discounted gift cards, so keep that in mind.
  • Traditional gift – Most families enjoy going out and finding a gift that is ‘just right’ for a loved one.

4. Assign a dollar value to each gift or person.

Let’s say you decide to mail out 100 cards. This might cost $1 per person when you include all printing and postage costs.  If that is the case, you’d designate $100 to cards.

Under the traditional gift category, we decide how much we’ll do for each person by relational groups.  We ask how much for parents, how much for kids, how much for cousins, how much for siblings, etc.  Interestingly, in our families, these numbers are different, depending on which side of the family they belong to.  Each family has a ‘giving culture’ that you’ll need to factor into the budget.

5. Check the total.

Add up the total for how much all your gifts are going to cost.  Is the number larger than the Christmas budget you set?  If so, you’ll need to shift some people from one category to another until you make the budget equal to what you’ve decided to spend.

6. Do the shopping and the work as you stick diligently to your limits.

When you go shopping, you should know how much you have to spend for Little Johnny and Uncle Frank.  In order for your budget to hold up, you must stay within the allocated budgeted amounts.

By following this simple step-by-step strategy, you ought to be able to get a loving gift for almost everyone on your list.  Some may receive a card or something homemade, but everyone will know that you love them and thought about them during the Christmas season.

Regarding Bank Loan

Posted on by DS

Thanks for the concern, I agree that these terms are usually provided in the repayment schedule, but due to liquidity problems, company is paying lumpsum amounts, (not as per repayment schedule), for eg. installment was to be paid as Rs.2 million (being Rs.1.5 mn principal and Rs.0.5 mn markup) but company has paid Rs.1 million, and then Rs.7 million then Rs.2.5 million, all the payments are uneven, and now the bank has gone into litigation, Court has rejected the bank’s claim regarding penal interest as the same is not allowed, Supreme Court’s Decision is already available in this regard. Now what about the actual payments, will these be accounted for against principle first or against markup first?

I would be thankful, if anybody can give me reference of any SBP’s Circular or HC or SC’s Decision????


Paid all my regular bills for the month

Posted on by DS

Finally got the bill from the allergist…she only bills me 2x a year, but I make sure I have the money saved. she is still cutting some of my bills in half, so she will get her check this week.

Grant struck in the form of a leaky water tank. I spent all morning trying to line up people to get me quotes to replace. 2 have already tried to talk me into changing my system completely…I have solar, it works fine, just need the tank replaced. I must use a plumber because a permit has to be pulled, the city needs its money. I do have a lead on a contractor that might be able to pull the permit and us do the work, I have already found out what the tank will cost. We shall see…

Our karate business is growing, we are at the break even point and I hope my DH decides to take a paycheck soon. Right now we are looking to get a “short” bus so we can do an afterschool program. The bus needs to be 15 or less seats–no special drivers license, the kids would be already registered to our karate program and my daughter is a certified teacher and would be the director.

So glad to be helpful

Posted on by DS

It is amazing how many billing errors doctors make. That is why I posted about all our billing error problems. I was hoping it would help at least one person. I got my wish.
BTW, we received a refund check from another doctor last week. It seems the insurance company paid them some more nearly six months after it had declared they had paid all they would. It was almost $30. I’ll take it. Put it directly on the one mortgage we have left..

A win!!!

Posted on by DS

In taking advice from Henry (thank you very much, Henry) I went over my children’s annual check-up bills with a fine tooth comb today. Lo and behold I found two BIG errors, not in my favor! Shocking!
One was that the Pediatrician had billed the insurance company for two well child care office visits. Bye, bye $121.05.
Second was the insurance company had billed me the full amount of my son’s well office visit instead of just a $35 copay. Bye, bye $74.74!
So all in all, I saved $195.79 today!!!!
Check your medical bills. It definitely is worth it!

Seems to be my pattern any more

Posted on by DS

So let me think here, what has happened in the last two weeks. We got the money difference back on that extended warranty policy the dealership had tried to bait and switch on us $714.
As I mentioned in my response to Shay, we got nearly $30 in a refund from a doctor bill overpay, because the insurance company paid more on the bill. Why I don’t know, but I’ll take it. At least the doctor was honest about it (let me say here, it was NOT the 3 Stooges office).
We have been doing some minor traveling working on trial runs (see blog listed below) to work the kinks out of our packing before we hit the road in the spring.
I ended up having to replace my five year old phone because of various problems it was having—it was a refurbished one. So now besides having to learn the ins and outs of Windows 10 on my new computer, I have a new phone to learn. Both were on the schedule to be purchased before we retired, just not this soon.
Now the really big news. DS (son not husband) got a promotion and a pay raise! He got back the 10% they cut everyone’s hourly wage plus $.80 per hour. It is still 10% below what the higher rank he is now at, but at least he got a raise!
I posted a blog post today, and have about 6 more wrote up, one a day for a week at least, because I have another one started. So stay tuned.

Friday, and again today I answer the phone to get a “dun” call from of all places my dh’s gp doctor

Posted on by DS

The canned message says we are in arrears on our bill to them. Say what? We met our out of pocket over 6 months ago. Why in the heck would we owe any doctor anything at this point.
I started thinking about it and remembered dh said he got charged for his rx the last 2 times he picked them up as well. Hmmm something stinks!
So first of all I contacted the people placing the phone call. Yep, according to them we were $70 in arrears to them. I explained we met out of pocket back in March and they said contact the dr and the insurance company.
Called dr first, they said the insurance company said we hadn’t met our deductible!!! Seriously? Hadn’t met our deductible? Remember we met that with the first $16,500 hospital bill back on the 15 of January!!! I thought I had that all straightened out.
So I called BC BS and she claimed we had only paid $3,150 for 2015 and we had a $5,000 deductible and a $12,500 out of pocket before everything should max out. I asked her how we could possibly not have hit those numbers when my dh’s medical total so far for this year came to $66,000? She said I just didn’t know how to calculate a deductible…Now any person who know me with a brain would have ducked for cover at that point. But noooo, this “lady” kept on telling me that they had over paid and therefore we owed at least $2,000 more to meet our deductible. EXCUSE me?
If nothing else the amount medicare paid would have covered that, I knew for a fact that Medicare had approved all the hospital expenses and therefore as secondary would have more than covered the deductible. She informed me that they had nothing to do with medicare, that we still owed them money.
I told her no way did I still owe money when everything they didn’t pay on the original hospital visit should have been paid by medicare and that alone should have been met my deductible and nearly my out of pocket!
Only then did she mention they had a bit of a “problem” with their system during the first six months of the year and that they MIGHT have over paid on some charges and underpaid on others…So she actually pulls up the file and immediately says, “see we paid $13,000 on that first $16,000 bill and we shouldn’t have paid that bill at all because you hadn’t met your deductible. I quickly pointed out that Medicare would have paid on the bill a minimum of $5,000 if not more and that would have still left $11,000 for them to pay. That I was in fact charged deductibles on bills through about April when I raised cane because they were charging me over $9,000 for my deductible at that point.
She goes in and starts looking at the file and starts muttering it was all messed up and then tells me. “You have a choice, I can go in and have everything all recalculated and you might end up owing the additional $2,000 or…you can just pay the medical from here on out until you reach that $2,000.”
Seriously? Does she think me a total idiot? There is ZERO way I am taking either option and I told her so. That if they messed up their calculations, that was entirely their fault and they couldn’t come back six months later and claim we hadn’t met our deductible on $66,000. Give me a break, I may be a senior citizen, but I still have a good mind.
That we had already paid all the doctors and hospitals office and we had with our payments combined with medicare payments if anything they owed me money!
She stammered around for a bit and then said she would like to re-do our calculations, without changing the payout record and get back to me with exactly who owed who what. They are suppose to call back on Friday. In the meantime I am doing calculations of my own.
Because the way I seen it right off the bat, yes they overpaid on that initial bill, because they didn’t charge me anything on it. They paid the full $16,000, but then they charged me $5,000 in deductible on later payments.
I checked medicare and discovered they had approved the ENTIRE $16,000 for payment, but didn’t pay because BC did…
So now we have a problem because it is 8 months later and medicare is not likely to pay a penny due to the delay BCBS created. I am NOT paying due to BCBS error. They can try and talk to medicare if they want to get their money back, but the way I see it that error right there covered our entire deductible and $11,000 of our out of pocket. That means BC BS owes me nearly $2,000 … plus the rest of dh’ medical needs to be paid in full by them for the rest of the year.
Considering he has an appointment with the 3 stooges that will involve lab, xrays, a $300 doctor’s visit and much more on the 18th, they better get this fixed immediately. I am NOT paying that bill, and I am not dealing with the 3 stooges again!
So hang on to your hats here we go again!