Business
5:41 pm
Mon April 22, 2013

Investors, donors warned to be wary of scams involving unrealistic dividends, bogus charities

Secretary of State Jason Kander has issued an alert to investors, warning them to be wary of fraudulent schemes.

In a release, Kander warns investors to look out for investment proposals that promise unusual or excessive returns. Scammers will offer high-yield investments through websites, social media, or in person. And there’s almost always a common trademark: the rates of return on those investments are through the roof…sometimes, more than one percent per day and as high as 100 percent per day. They also include vague strategies that promise little or no risk to the investor.

Kander’s office has provided some signs to help you detect a fraudulent investment scheme:

In additional high yields, the proposed “investments” sometimes ask you to deposit or wire money to a foreign-based account. Many of them offer a special “referral bonus,” and their literature often contains poor grammar and spelling. Experts say you should also avoid making any investment that cannot provide solid information about the company, dealer, product, or how the investment will be used. And always ask for an official prospectus – that’s the document that describes the financial security for investors.

And scam artists have also been busy taking advantage of the recent tragedies at the Boston Marathon and the fertilizer plan in Texas. The IRS advises donors to thoroughly check out a charity before donating. Both FEMA.gov and IRS.gov have lists of charities that qualify for tax-deductible donations. Don’t give out your Social Security number, credit card number, bank information or password to someone if you’re not completely certain they’re part of a legitimate charity. Often, fake charities will have names that sound very similar to real ones.