Transcript:
Marie Marinovich:
How do I protect myself from investment scams?
Tom Vaughan:
That’s a good question that’s come up a couple times, actually. And it’s, it’s, uh, tell you a lot of the things that are happening happen to the senior community. And, you know, we, our average client is older. So you know, it’s something that comes up once in a while and some of the conversations, and there’s a lot of different ways that people kind of fall into these particular scams, you’ve got to be really careful with people that are, you know, talking to you on the phone, you don’t know where they are. And you’ll be super careful with that. But over the years, you know, if you look at kind of some of the different scams, especially some of the bigger scams, they’re all very similar in the investment world, they’re generically, what they call a Ponzi scheme. So Ponzi schemes pretty simple, you get a group of people together, they give money, you promise some rate of return, and you’re actually giving them back part of their money. And as long as you get more people coming in, you keep giving that money to them, and that they get money, it just keeps on going to have to bring people in. And so what you really want to watch out for there, in my opinion, they all pay a higher rate of return than average. And a lot of times it’s more consistent than average.
Also, you know, the Bernie Madoff is the largest Ponzi scheme that I can remember ever happening in my lifetime. And I think he had about a 12% return, right. And for a really long period of time, and actually one of the competitors hired this mathematician to try to reverse engineer the results that were coming out of this portfolio. And he actually determined that it was impossible, it had to be a scam. He went to the SEC, they discarded it. And they ignored the information. He ended up actually testifying in front of Congress after they discovered the Madoff thing. Most of these things collapse during big downturns. So Madoff collapsed in 2008 during that downturn, and because the relies upon people continuing to put more money in as you pay out, because then you’re spending the rest on your travel and homes that you have all over and all these crazy things that these people end up doing. And so what you want to watch for higher returns that are more consistent than they should be doesn’t mean that it’s definitely a scam, but it’s one of the signs. The other thing is just you know, it’s easy for these people to make statements and send you fake statements. It’s easy for them to even to maybe fake a website as far as that goes. And so I think for example, with with our firm, here, we clear through TD Ameritrade, right, which is now merged with Schwab. So you know, it’ll eventually be Schwab. But you definitely want with all of your investment accounts, you want to be able to go directly to that custodian, TD Ameritrade in this case, and look at your money on that website, because that would be very difficult for anybody to replicate. Because you, you can see the domain name there, you can go directly to that. And the custodian is the one holding your money, right. And so that gives you a chance to kind of double check, you know, what’s happening with your statements, what’s happening with anything else that you might be able to see online. I would definitely encourage people that have investment accounts, to have the portal set up and signed up for the custodian where their money is, and then be able to go in there and check that on a regular basis. That would have avoided a lot of scams, just just right there as far as that goes.
So I think the rest are revolve around just these calling schemes, you know, and people that are, you know, calling for, there’s a whole host, I mean, there’s an unbelievable, sometimes they’re just trying to steal identity pieces, you know, Social Security numbers, credit card numbers, and those types of things. Sometimes they’re trying to get you to pay money. There’s some pretty wild stories of people that have paid a lot of money for things that you know, they never got, it was just a scam. So I think it’s always important to be able to go directly to that source as much as possible. If I get an email from my credit card company, I never respond to that email ever. I will then maybe go to my statement, look up the phone number or call the credit card company right off of my statement, and then ask them about this scenario. And you know, whether it’s true or not, right, so that’s one of the ways that you can avoid scams is don’t click on stuff in your email box. We as a, as a practice here, we actually have a service that sends fake emails to us, so that we can practice not clicking on you know, hey, you have A message or, Hey, your password is needs to change, you know, and click here and wants you to put in your old password. Or at all there’s a bunch, right? I get them every day. And so that you know, don’t click on things and your email around in a different manner to basically check. And so if you got an email from me, for example, and you’re questioning it, you know, call our phone number and ask, right, because, you know, that’s hard for somebody to interrupt and you know, what have you too. So they’re there, there’s some basic things that you can do to try to protect yourself as much as possible. From those things.
I just saw a whole I’ve just read a whole article on these credit card scammers, the skimmer sorry, that are in the gas stations. And it’s really fascinating what they’re doing there. But you can kind of tell because they stick out a little bit further. And so really, you know, watch for that. But the one recommendation they made there, which I thought was fascinating, it takes quite a while for for somebody to get that installed. And so what you want to do is go to the pump that is nearest to the window, where the attendant is and that’s where you should get your gas don’t go way over in the corner, where theoretically somebody might have had more of a chance to put in that skimmer. Anyway, so I thought that was pretty interesting. I’ve never done that before. I’m gonna start doing it now though. But because that’s a huge one. That’s a there’s a lot of people getting their credit card stolen. You know the numbers stolen and used in other ways.