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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Beware of these tactics used in fraudulent investment pitches

Who couldn't use some extra cash, especially as you reach your retirement years? Perhaps you are considering making some investments in order to grow your portfolio faster than a simple savings or money market account.

The question many people in your position ask revolves around finding the most lucrative investments. So, when you receive a cold call about an investment, you may be tempted even though you are skeptical. Those involved in fraudulent investment pitches rely on you being just interested enough to stay on the line.

Common tactics

According to the Financial Industry Regulatory Authority, investment fraudsters use these common tactics to entice you to hand over your hard-earned money:

  • The social consensus tactic attempts to make you believe that other people have already invested. They may even claim to have invested themselves.
  • The phantom riches tactic leads you to believe that the return on your investment will make you rich.
  • The scarcity tactic attempts to create a sense of urgency. The caller claims the window of opportunity is closing fast and you need to get in on it right away.
  • The source credibility tactic involves attempting to convince you that the caller works for a reputable firm or possesses certain experience or credentials.
  • The reciprocity tactic involves doing something for you if you make an investment, such as a break on commission.

If you receive a call attempting to entice you with one of these tactics, you could simply hang up the phone, ask questions, get more information and put yourself on the National Do Not Call Registry run by the Federal Trade Commission. You should know that fraudsters often use these tactics on people like you who have retired or will in the near future. They also tend to go after individuals who seem self-reliant, optimistic and college-educated.

If these warnings come too late

If you became a victim of one of these tactics, don't be embarrassed. These individuals are often quite convincing and sound credible. These schemes are said to be common for a reason -- many people have found themselves in the position you are in now. What you may want to focus on now is getting your money back.

Other individuals in your position have made use of legal resources here in the Los Angeles area to that end. Securities fraud litigation can be complex, and after what you went through, the last thing you need is additional stress and frustration.

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