Wednesday, September 10, 2008

Avoiding Scams

In all the ways we manage and use money, it is important to protect ourselves from loss or detriment. This is where we need skills to manage the various risks that occur throughout our lives.

A popular belief that makes people vulnerable to scams is the idea that there are secret short cuts to wealth that are only known by certain financial “gurus”. The offers these types of people make often vary but tend to involve unusually high rates of return on investment. Believing that all businesses must be legitimate and that wealth or other benefits can be obtained through special tricks can place you at risk.

Before you invest money with anybody you should do these things first:

  1. Ask for the names of organisations that they are members of. People dealing with money and investments usually belong to well known government and industry bodies who could testify to their membership and conduct.
  2. Ask for written testimonials or verbal references from customers.
  3. Check government regulators like ASIC and state Offices of fair Trading.
  4. Seek the advice of a professional you know and trust like your accountant, solicitor or financial planner.

The Australian Securities and Investments Commission allows you to search a company and establish when it was formed, check disqualified persons, and provides alerts on recently uncovered scams and other useful consumer information through its affiliate site FIDO at .

State government Fair Trading offices also provide information on bogus investment schemes. Check the Queensland Office of Fair Trading at . You can also look at other statement websites in similar departments for alerts on recent scams as well as other useful information on consumer protection.

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