Good times or bad, their are crooks out their trying to get your money with different schemes. They all have one theme, and that’s to promise a quick way to make a lot of money, usually by promising high rates of return on your money. Remember if they guarantee that you will not lose any money by their investment scheme, that is sure sign that you will.

Real Estate Investment Schemes.

State securities regulators have noted a rise in scams disguised as offers to help homeowners “save” their homes or “fix” their mortgages, usually in exchange for a fee paid in advance. In California, advance fees to modify loans are now illegal. While reverse mortgages  are legitimate lending products, some unscrupulous salesmen try to convince consumers to inappropriately invest the funds.

Ponzi Schemes.

Despite the heightened aware-ness of Ponzi schemes following Bernard Madoff’s 150-year prison sentence for multi-billion dollar fraud, these scams continue to trap investors. The Ponzi scheme is a house-of-cards swindle in which high returns are paid to initial investors out of the funds of later investors, who end up losing all or most of their money to the promoter. Beware of investment opportunities promising high and steady rates of return. Short-term Commercial Promissory Notes.

Short-term commercial promissory notes that are nine months or less in duration may be touted as being “insured” or “guaranteed,” but the insurance com-panies generally are located outside of the United States, are not licensed to do business in the United States, and lack the resources necessary to deliver on the promised guarantees. Unlike publicly advertised promissory notes, promoters of these notes usually at-tempt to use commercial paper exemptions as a basis for selling the products without registration. The com-mercial paper exemptions apply only to high-grade com-mercial paper traded by major corporations – not to these risky notes pushed to the public by a sales force paid with extremely high commissions.

Gold Bullion and Currency Scams.

With the high price of gold, investors should beware of gold bullion scams in which the seller offers to retain “purchased” gold in a “secure vault” and promises to sell the gold for the investor as it gains in value. In many instances the gold does not exist. Similar are the many forms of foreign exchange (forex) trading schemes. Trad-ing in foreign currencies requires resources far beyond the capacity of most individual investors. Promoters profit by charging high commissions or selling invest-ment strategies assuming that trades are actually made. In many instances there are no trades; the money is sim-ply stolen

. Leveraged Exchange-Traded Funds (ETFs).

This relatively new financial product has been offered to individual investors who may not be aware of the risks. The funds, which trade throughout the day like a stock, use exotic financial instruments, including op-tions and other derivatives, and promise the potential to provide greater-than-market returns as the value of the underlying assets rise or fall. These volatile funds typi-cally are not suitable for most retail investors.

Source:”target=”_”blank”> Kentucky Department of Financial Institutions.