This page is intended to provide the reader with an alternative perspective of the News. It is our intention to broaden the readers view of the world and perhaps create questions about the reporting within their own country.
We are currently reviewing a number of news feeds and will place them here as soon as we can.
Meanwhile here are some interesting articles concerning scams.
Arizona Corporation Commission lists traps for investors
www.eastvalleytribune.com
- Ed Gately, Tribune - June 2, 2007
They’re out there just hoping investors will slip up and fall for something that sounds too good to be true. The Arizona Corporation Commission has released its annual forecast of the top 10 traps likely to ensnare investors.
“Those 10 really comprise the bulk of what we’re seeing these days,” said Heather Murphy, commission spokeswoman. “The biggest thing that investors should do to protect themselves is call our Securities Division to see if the investment and the person promoting the investment are properly registered.”
Con artists are sophisticated, the swindles are creative, and investors have to do their homework, said Commissioner Bill Mundell.
“It is a sad reality, but most people spend more time researching the next car they’re going to buy than they do researching the person who will be investing their hard-earned money,” he said.
This year’s top 10 traps are:
• Affinity fraud, or fraudulent investments that target religious, ethnic, cultural and professional groups.
• Foreign exchange trading. The scams attract customers with sophisticatedsounding offers placed in newspaper advertisements, radio promotions or on Internet sites.
• Internet fraud. Fraud artists steal investor funds by raiding their online trading accounts. Also, “pump and dump” schemes remain prevalent online.
• Investment seminars, promising a free meal along with “higher returns and little to no risk”.
• Mining ventures, or unregistered or fraudulent offerings in precious metal mining ventures.
• Oil and gas scams. Rising oil and natural gas prices have made a variety of traditional and alternative energy projects attractive to investors, but most are high-risk and inappropriate for smaller investors.
• “Prime bank” schemes. Prime banks do not exist and the scam artists have no intention of creating a profit for anyone but themselves.
• Real estate investment contracts. Just because an investment involves real estate, it may still be a security, subject to full regulation under the state and federal securities laws.
• Unlicensed individuals and unregistered products. Anyone selling securities without a valid securities license should be a red light for investors.
• Unsuitable sales. Variable and equity indexed annuities, for example, may be unsuitable for senior citizens who may need ready access to their funds in the event of a serious medical problem.
“Someone soliciting you via telephone call, an e-mail or a chance meeting somewhere, they don’t know what your particular investment goals are or what your priorities are,” Murphy said. “They want to make the sale. You should always be filtering the information through that.”
Violation of privacy laws increases chances of fraud
www.canada.com
- Carly Weeks, CanWest News Service - June 1, 2007
OTTAWA - The majority of businesses in Canada collect personal information from customers, but many are ignoring privacy laws and may be using sensitive data illegally, putting Canadians at risk of fraud, warns new research released Thursday by the federal privacy commission.
What's more, a new survey conducted for the commission reveals an overwhelming percentage of staff -- about two-thirds -- at Canada's small, medium and large businesses have little or no training for handling personal information and ensuring that it does not fall into the wrong hands.
Results of the survey were made public in conjunction with the commission's annual report, which urges the private sector to do more to protect the personal information it collects in order to prevent massive security breaches like the ones experienced earlier this year by TJX Cos., the parent company of Winners and HomeSense, as well as the Canadian Imperial Bank of Commerce's Talvest Mutual Funds.
"I am concerned that there are still some businesses that don't understand to what extent that consumers value privacy," Privacy Commissioner Jennifer Stoddart said in an interview.
Despite the fact that more than 60 per cent of businesses said they collect personal information from customers, about one-third aren't complying with the Personal Information Protection and Electronic Documents Act, which sets rules and limits on how the private sector collects, uses and discloses the personal information it collects.
Although it was passed seven years ago, 15 per cent of businesses surveyed said they still haven't started putting the necessary policies in place to comply with the law, while 16 per cent said they are in the process of putting measures in place.
California Issues “Dirty Dozen” Investment Scams for 2005
Sacramento, February 2, 2005 - The California Department of Corporations (Corporations), California’s securities regulator, today issued a list of its “Dirty Dozen” Investment Scams for 2005 and a warning to investors to thoroughly investigate new investment opportunities before handing over their money.
“These schemes offer products and pitches with unrealistically high returns that may sound tempting to many investors,” said Corporations Commissioner William P. Wood. “If the investment opportunity sounds too good to be true, it usually is,” Wood added.
The North American Securities Administrators Association has alerted investors to scams that are commonly seen throughout the United States, and Corporations wants investors to be aware of the most prevalent schemes that harm both consumers and legitimate investment businesses in California.
Corporations advises potential investors to protect themselves from becoming victims of fraud by doing their homework before making an investment. Investors can contact Corporations before they invest to check the registration status of the investment they are considering and/or the licensing status of the person who is selling it through a toll-free telephone number, 1-866-ASK-CORP (1-866-275-2677).
The following is the list of Corporations’ “Dirty Dozen” Investment Scams for 2005 in California:
1. Senior Investment Fraud. Low interest rates, rising health care costs and an increased life expectancy have set seniors up as targets for con artists peddling investment fraud, including promissory notes, charitable gift annuities and viatical settlements. Seniors are particularly targeted because they often have access to a large amount of assets as a result of a lifetime of savings and buildup of home equity.
2. Variable Annuities Sales. As sales of variable annuities have risen, so have complaints from investors—most notably, the omission of disclosure about costly surrender charges and steep sales commissions. These surrender charges and high fees combine with other factors to make variable annuities inappropriate for many investors, particularly for purchases in retirement accounts. Most recently, Corporations launched a sweep of broker-dealer offices statewide to weed out fraudulent sales practices of variable annuities.
3. Charity/Tsunami Scam. Con artists often try to make money out of tragedy. There may be con artists attempting to collect money under the guise of being involved in the tsunami relief effort or by offering phony bonds to finance the reconstruction of areas affected by the disaster. Donors need to check out the charity carefully, demand details, beware of excessive pressure, and make sure any donations are tax deductible. E-mail scammers are sending out pleas for help from phony survivors, invading recipients’ computers and stealing financial and other information from those who click on links in the documents.
4. Ponzi/Pyramid Schemes. Typically an unknown company is offering eye-popping returns from some plausible sounding, but vaguely described business activity. Such schemes are often spread by word of mouth through groups such as churches, ethnic groups, or professional affiliations, frequently in an atmosphere of secrecy. The formula is simple: Promise high returns to investors and use their money to pay previous investors.
5. Military Fraud. Predatory salespeople target military recruits and active military service personnel who are misled into purchasing unsuitable investment products. The NASD, together with the SEC, recently settled a major mutual fund practice case against a firm that specialized in selling expensive systematic investment plans to military personnel. The firm agreed to pay $12 million following findings that the plans were sold in a misleading fashion. The fines will be used for restitution to affected investors with the balance used for investor education for the U.S. military and their families.
6. Viatical Settlements. One of the riskiest investment products, viatical contracts are interests in the death benefits of life insurance policies. Investors get a share of the death benefit when the insured later dies, after a fee is paid to the viatical investment broker. These investments are extremely risky for numerous reasons, including difficulty predicting life expectancy, the promoter not paying policy premiums as promised, or the promoter simply stealing the investor’s money. Last year, Corporations obtained a judgment of $20 million against a fraudulent viatical investment firm in San Diego.
7. Living Trust Mills and Other Pretext Solicitations to Seniors. Corporations' SAIF (Senior Against Investment Fraud) program regularly receives large numbers of complaints from the elderly on living trust mills. The initial approach to clients may be to solicit seniors at “seminars” purportedly designed to educate participants about the benefits of living trusts or other estate planning subjects such as Medi-Cal planning or general financial planning. These seminars misrepresent the actual business of the sales representative and the true purpose of the solicitation. The real goal of the sales agent is to obtain detailed personal financial information, which will then be used to sell the senior an unsuitable or unlawful financial or investment product.
8. Bait and Switch Schemes. Investors should be very wary about advertising in which a particular investment promises spectacular profits, but investors have to be lured into the office to get it. This is the bait. Once in the office to purchase the investment, the sales agent discourages the investor from investing in the advertised product. The sales agent then switches an investor into a different investment.
9. Affinity Group Fraud. Members of closely-knit religious, ethnic, and cultural groups are targeted by con artists who share or claim to share their characteristics or interest. In an Asian community in California, a finance lender charged in excess of 200 percent interest in some cases.
10. Wrong Numbers and Stock Tips Scam. Some people are finding that they have received a “misdialed” call from a stranger, leaving a “hot” investment tip for a friend. The message is designed to sound as if the caller didn’t realize that he or she was leaving a hot stock tip on the wrong message machine. Con artists have also sent these fraudulent messages through e-mails and faxes.
11. CD + Bonuses. Scammers promise investors tantalizingly high rates of return on investments by including a bonus payment to attract investors. In an enforcement action brought by Corporations, a firm offered one-year certificates of deposits (CDs) that were purportedly FDIC-insured with yields substantially higher than those actually available from any actual FDIC-insured institution. The firm paid the bonus out of its own pocket; investors were tricked into sales of annuities.
12. Online Escrow Fraud. Purchases through online auction sites such as eBay have become a popular arena for fraud. Online escrow services are often used for expensive online purchases such as computers, electronics, jewelry, and cars. Legitimate online escrow companies act as a neutral third party that holds payment for merchandise until the buyer receives the merchandise. However, a fraudulent escrow company will lure unsuspecting buyers or sellers to transact business through their Web site and then keep the funds and/or goods.
In an effort to combat online escrow fraud, Corporations has issued Desist and Refrain orders to 41 Internet escrow providers since spring 2004 to shut down fraudulent escrow sites and formed the Escrow Fraud Task Force, a collaboration of state and federal regulators, law enforcement, industry groups, and businesses.
The Department of Corporations is California's Investment and Financing Authority. Corporations is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information call 1-866-ASK-CORP (1-866-275-2677) |
