Promissory notes. This “paper” promises a fat return through a private investment or a healthy interest rate on informal loans.
The skinny: “Unregistered promissory notes are often covers for Ponzi schemes and other scams,” says the NASAA. Don’t let it give you a false sense of security. Always check with your state regulator to determine whether a promissory note and its sponsors are properly registered.
Mirror trading. Some scammers tell you that with their help your investments will mirror ones made by someone super-rich, such as Warren Buffett. The latest lure comes with the promise of an “automated trading platform” that instantly duplicates the market transactions of the third party.
This can lure you into a false sense of security, the NASAA says, leading you to stop paying attention to your trades. The people offering these services may have conflicts of interests and phony credentials and may use your complacency to launch fraudulent schemes.
Bogus credentials. That business card may tout all kinds of lettered certifications, but what do they mean? The CHSG used by one broker in Utah stood for “certified high school graduate.”
More often, shady investment advisers claim nonexistent law degrees or CPA certificates. To separate fact from business card fiction, see this AARP Bulletin article for links to free go-to resources.
You may also like: Can I get free identity theft protection?