Investing for the future is exciting, but it can also be a little overwhelming with all the unfamiliar jargon, ever-changing regulations and the promise of a quick return on your investments by local advisors and entrepreneurs.

Investing for the future is exciting, but it can also be a little overwhelming with all the unfamiliar jargon, ever-changing regulations and the promise of a quick return on your investments by local advisors and entrepreneurs. Whether you’re a do-it-yourself kind of investor or you work with advisors to help you make the most of your funds, here are a few tips to help safeguard your money against scams happening right here in Northeast Wisconsin.

The Scams

• A so-called financial advisor promises to turn a small investment (like $10) into thousands of dollars in a short amount of time (a few weeks to a month). In many cases, the initial investors DO start receiving what they think are interest checks from their investments leading them to invest more money and invite friends to join. In reality, fraudsters are using money or funds from new investors to pay out interest checks. Eventually there aren’t any new investors and the fraudster runs off with the money, or gets caught like this Manitowoc man who collected more than $5 million.
• An entrepreneur pitches a new product idea and asks investors to help with patent, production, marketing and other start-up costs with the promise of a stake in the company. The problem is the company or product doesn’t exist and the money is used for personal expenses, like this Cecil man who said he was developing a new fishing lure and used the investments for personal and gambling expenses instead.

How to spot “get rich quick” investment scams

1. Promises of big returns in a short amount of time. Investments take time to grow and opportunities that promise a high—and quick—return are often too good to be true.
2. You only heard about it from a friend of a friend. Do your homework—ask around and do a little online digging about investments that spread by word of mouth.
3. It’s a “one time only” kind of deal. While there are some legitimate investments that require quick action, in most cases, pressure to buy now is a sign that you should think twice before handing over your money.
4. No background info…anywhere. If you’ve looked online and can’t find any details on the entrepreneur, advisor, company or product, odds are it isn’t the real deal.

What you can do

If you’re approached by an entrepreneur with a new product or company idea, or a financial advisor with a new investment option, check to see if the opportunity is legit by asking for a list of other investors and getting referrals, or by visiting the Financial Industry Regulatory Authority website or the U.S. Securities and Exchange Commission website.

How Verve can help

If you think your Verve account is at risk because of a sketchy investment or any other type of scam, call Verve immediately at 800.448.9228. One of our team members can help check your account for purchases you did not make and safeguard your account against fraud.

It’s Verve’s goal—in line with our guiding 7 Cooperative Principles—to provide education, training and information to help our members stay financially fit. Verve is committed to keeping our members educated when it comes to their finances by providing details on financial risks and ways to stay safe. Help your friends and family stay safe against investment scams by sharing this blog post.