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Scam Avoidance: NASAA Identifies 2009’s Top Investor Traps

With investors under pressure from the struggling economy, North American Securities Administrators Association (NASAA) reminds investors to take stock of their financial education and arm themselves with the knowledge to sidestep “investor traps.”

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Many of the traps identified by NASAA’s Enforcement Trends Project Group promise high returns to cash-strapped investors but provide little if any disclosure of risks and offer high commissions to aggressive sales forces.

This year, NASAA has identified the following as the greatest potential threats to investors:

Real Estate Investment Schemes: NASAA members have noted a rise in scams disguised as offers to help homeowners caught up in the turbulent housing market “save” their homes or “fix” their mortgages, usually in exchange for a fee paid in advance. NASAA notes that some homeowners, particularly seniors, may be attracted to reverse mortgages, which are a legitimate lending option. However, the resulting lump sum home equity payment makes them an attractive target for unscrupulous salesmen, who may attempt to direct these funds toward worthless or unsuitable investment products.

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September 2009 Issue

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Scam Avoidance: NASAA Identifies 2009’s Top Investor Traps

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September 2009 Issue