Consumer and Research Resources

Investor Education and Protection

Becoming an educated investor not only offers the best means to achieve your financial goals, but also helps you avoid costly mistakes and falling victim to fraud. The most important step you can take to protect yourself from investment fraud is to avoid it in the first place. Before you invest, do your research!

Learn to Spot the Warning Signs:

• Be wary of unsolicited investment pitches. Ask yourself, "What's in it for the person trying to make a sale?" Investment Fraud Risk Meter
• If the investment opportunity sounds too good to be true, it probably is (unrealistic or higher rate of return than the market rate of return). Investment Fraud Risk Meter
• Don't invest in a product you don't understand or do business with a professional you haven't researched (see below). When Your Broker Calls, Take Notes
• Make sure you understand how the investment professional is compensated. Ask, "How do you get paid? By commission? Amount of assets you manage? Another method?"
• Don't feel pressured to make a decision immediately. A legitimate investment opportunity will be available after you have had time to research it.
• Make sure the investment is appropriate for your risk tolerance, financial goals and life stage. Just because someone you know is investing in a certain product, doesn't mean you should. Although the OFR cannot give you investment advice, we can give you the tools to make an informed investment decision.

Professional or Product	Research
Investment professional or product (Florida)	Florida Office of Financial Regulation
Investment professionals or products (Other states or Canadian provinces)	North American Securities Administrators Association (NASAA)
Investment adviser or product	U.S. Securities and Exchange Commission (SEC): Investment Adviser Public Disclosure EDGAR System (Company filings)
Brokers	Financial Industry Regulatory Authority (FINRA)
Insurance agents (Florida)	Florida Department of Financial Services
Commodities and Futures	Commodity Futures Trading Commission (CFTC) National Futures Association (NFA)

Investment Scam Red Flags

While the majority of investment opportunities are legitimate, scams are more common than most people may realize. More than 80 percent of adults (aged 40 years and older) have been solicited to invest their hard-earned money in potential scams. It is important to protect yourself by learning the common red flags that may indicate an investment scam is being perpetrated.

Scammers will posture themselves as legitimate and experienced investors to entice victims to hand over their money. It’s important to know what to look for and listen to your intuition. If something doesn’t seem right, it probably isn’t. Below are some of the common red flags of an investment scam.

• The investment is guaranteed to have high returns with no risk. Investment returns cannot be guaranteed. A licensed investment professional should always inform you of the risks.
• The offer is only available for a limited time. If it is a legitimate investment, it will likely be there tomorrow. An investment professional should never pressure you into making a decision. High pressure to make an investment is a major red flag.
• The investment is tax-free. Taxes on the profits of legitimate investments can be deferred until sold but taxes cannot be avoided.
• The investment is offshore. There are legitimate offshore investments, but they are normally made by sophisticated investors. For a scammer, persuading someone to invest by sending money offshore is often a way to separate an investor from their money quickly. Remember if it sounds too good to be true, it probably is too good to be true.
• There is little to no written disclosure material. Legitimate investments will have written disclosure materials.
• The promoter indicates that he or she is one of you and can be trusted. Credibility can be faked. Always verify a financial services company or professional with the Florida Office of Financial Regulation online, or by calling (850) 487-9687.

Reduce your risk of becoming a victim by doing your homework on the product and the business before making a financial decision. Make sure that the business or individual is properly licensed. Talk to multiple professionals before making a commitment. Request written information about the product and the agreement and be sure to read everything carefully and completely. Think about what your short-term and long-term financial goals are and decide if the product is in line with your goals. Take the time you need to make an informed decision.

Romance Scams

Online social platforms are everywhere, including dating websites. Unfortunately, scammers are trolling online social and dating platforms, looking to target unsuspecting victims. It is important to remain vigilant when navigating online social connections.

Romance scams can happen on social media networks and websites dedicated to romantic connections. Common claims by scammers, posing as online love interests, are that they would like to meet in person but cannot afford to, that they are living in another country or even that they are responsible for a sick relative. These false claims will usually lead to a request for money. If the person has a list of reasons why they cannot meet in person, especially any excuse relating to money, it may be a scam.

Below are some tips to help protect yourself from becoming a victim:

• Remain wary of online friends who ask for money or for information about your financial situation, especially unsolicited friends.
• Think twice before you post something on social media. Consider if the information could be used to help scam you.
• Don’t give out location information or any personal identifying information to anyone online.
• Beware of anyone who “comes on strong,” is aggressive, or quickly asks you to move your relationship offline.
• Be extremely cautious of any investment opportunity or business venture pitched through social media or online dating platforms. Do your homework on any opportunity before committing, and make sure that the business or individual is properly licensed.

Scams targeting the Elderly

As Floridians age, retirement savings and other accumulated wealth help ensure financial security and can lead to a lifetime of happiness in retirement. Unfortunately, wealth is one of the reasons scammers target unsuspecting elderly citizens. For the elderly, who are reliant on their savings for income, the current low interest rate environment can make investment schemes ever more enticing. A report by the FINRA Investor Education Foundation found that Americans ages 65 and older are more likely to be targeted by con artists. It is important to be on the lookout for potential financial scams.

Financial scams that typically target the elderly are:

• Telemarketing Scams – The scammer poses as a telemarketing company either collecting money for a phony charity or selling a fake product. They ask for credit card information or bank account information. However, no products or receipts materialize, and the scammer makes off with your money.
• Lottery Scams – The scammer informs the victim that they have won the lottery or sweepstakes and need to pay a fee in order to receive the prize money. However, there is no lottery money and the fee payment is pocketed by the scammer.
• Investment Schemes – The scammer offers an investment product with unrealistically high rates of return, a financial product so complex that it is difficult to understand, or an investment that is only available for an extremely limited time. Often, they will employ high-pressure sales tactics to persuade the victim to invest. Unfortunately, the investment is not real, and the scammer instead uses the money for their own purposes.
• Grandparent Scams – The scammer calls pretending to be a grandchild and asks for money to solve some unexpected problem or issue. Often, they say that they don’t want to get into trouble with their parents. The scammer will ask the victim to wire money or load money onto a prepaid debit card. By the time the grandparent learns that their real grandchild didn’t make the call, the scammer is long gone with their money.

Protect yourself from becoming a victim by learning about the risks. Walk away if you encounter classic red flags such as unsolicited offers, promises of little or no risk, any upfront fee collected before services are provided and high-pressure sales tactics like "you must act now" or "this offer won’t last long."

It is also important to remember that legitimate financial products or investments are not suitable for everyone. Investments associated with free lunch seminars, reverse mortgages and stream-of-income payouts could be legitimate financial products and are often marketed to elder citizens, but may not be the right decision for you. It is imperative to make sure the investment products you choose are aligned with your financial goals before making a commitment or signing a contract.

Scams Using Cryptocurrency Kiosks

Be on guard for scams that involve cryptocurrency kiosks or ATMs. Unfortunately, scammers are requesting or demanding victims use cryptocurrency kiosks as part of a scam because the transaction is anonymous and cannot be canceled, reversed, or refunded.

Scammers use several tactics to create a false sense of urgency to get the victim to withdraw money from their bank account. The scammer will provide the victim with a digital wallet address or a QR code linked to a cryptocurrency wallet and instruct them to deposit the money into the cryptocurrency kiosk. Then, the scammer disappears with the money. Some tactics scammers use include:

• Posing as a love interest – Scammers troll social media networks and dating websites looking for victims. Common claims are that they would like to meet in person but can’t afford to, that they are living in another country, or even that they are responsible for a sick relative. These false claims usually lead to a request for money using the cryptocurrency kiosk to send them financial assistance.
• Posing as tech support – Scammers pose as technical support staff from a reputable company, claiming they have detected a virus and offer a quick fix to gain remote access to the victim’s device. But they corrupt or disable the device, so they can extort money from victims. They will direct victims to a cryptocurrency kiosk to send them “ransom” money to regain access to their device and data.
• Posing as bank representative or law enforcement – Scammers will claim to be calling from the victim’s bank and make false representations that law enforcement has identified the victim’s account as having been involved in something illegal and they need to move their funds out before they are confiscated or frozen. Then, they will direct the victim to withdraw money from their bank account and “temporarily” convert it to cryptocurrency using a cryptocurrency kiosk so they can deposit it later in a different bank account. Once the victim does this, however, they never see their money again.
• Texting or direct messaging – Scammers strike up a conversation with victims after sending a random text message or a direct message on a social media platform. They work to gain the victim’s trust over weeks, or even months, and then pitch some type of cryptocurrency investment scheme and direct the victim to use the cryptocurrency kiosk to invest in the scheme. The scammer will continue to engage with the victim and repeat investment pitches until they have separated the victim from their entire life savings.
• Creating fake pop-up ads – Scammers create pop-up advertisements offering a fake anti-virus protection program. Once the victim calls the customer service number listed in the ad, scammers will convince them their device has been hacked and they need to convert the cash in their bank account to cryptocurrency using a cryptocurrency kiosk to safeguard their money.

Be extremely cautious if you encounter someone who requests or demands payment through a cryptocurrency kiosk and keep in mind that no legitimate business will make such a request.

Always take the time you need to independently verify unsolicited offers, and don’t share personal identifying information or financial details until you’ve confirmed the legitimacy of the offer.

Credit vs Debit Cards

The majority of consumer purchases are no longer with cash or a check. Rather, the simple swipe of plastic makes spending convenient, safe and potentially more rewarding for consumers. Nearly 80 percent of spending in the United States is made through either a credit or debit card. Credit and debit cards are accepted at a wide variety of retailers and can be used for many things, like shopping and paying your bills online. With so many options out there, how do you determine the card that is best for you? Consider the following information when deciding which type of card is appropriate for your spending habits:

Credit Cards

• Credit cards can help establish your credit score. Making purchases and staying current with your payments helps improve your credit score over time.
• When it comes to financial fraud, credit cards offer maximum protection. In the event of fraudulent activity, you are typically only liable for $50, if anything.
• Credit cards offer the flexibility of buying now and paying later. This allows the option of making gradual payments over time on big ticket items.
• Some credit cards offer rewards programs, such as cash back or travel miles for purchases made with your card.
• There are fees associated with most credit cards. Make certain you are aware of the interest rate as well as annual fees that your card carries with it.

Debit Cards

• With a debit card, debt is not an option. You are only allowed to spend what is available in your checking account.
• Debit cards usually require the use of a personal identification number (PIN) to make purchases or retrieve cash from an ATM – making your card unique to you.
• Unlike credit cards, debit cards require no annual fees. However, if you use your debit card to retrieve cash from an ATM, a service fee may be charged.
• Debit cards do not require established credit. If you have a checking account, you are eligible for a debit card through your financial institution. There are also reloadable prepaid debt cards for those without a checking account.
• If your debit card is stolen, thieves may gain direct access to your bank account.

Protect your credit and debit card as you would cash. Everyone’s financial situation is unique, there is no one-size-fits-all approach to financial decisions. Before making a decision about which card(s) are best for you, assess your financial needs and weigh the pros and cons of each card carefully to determine the most suitable option.

Financial Fraud

The majority of consumer purchases are no longer with cash or a check. Rather, the simple swipe of plastic makes spending convenient, safe and potentially more rewarding for consumers. Nearly 80 percent of spending in the United States is made through either a credit or debit card. Credit and debit cards are accepted at a wide variety of retailers and can be used for many things, like shopping and paying your bills online. With so many options out there, how do you determine the card that is best for you? Consider the following information when deciding which type of card is appropriate for your spending habits:

Investment Fraud – The scammer approaches the victim, gains their trust and solicits money for an investment that is "guaranteed," "little to no risk" or has "very high returns." The investment opportunity may sound too good to be true and there may be little or no written information about the investment. Typically, the size and location of the business is not consistent with the representations made.

• Real-Life Scenario: From 2003 through 2013, Scott Campbell used online dating websites to target single women with an investment scam in the Orlando area. He enticed more than 30 victims into investing in his purported musical recording and talent search business with promises of two percent of his company’s future profits. However, the OFR's investigation revealed that Campbell spent most of the $1 million collected from investors on gambling and personal living expenses. Campbell was sentenced to 20 years in prison and 10 years of probation in February 2015.

Ponzi Scheme – In this type of investment fraud, the scammer pays "promised" returns to early investors using money obtained from more recent investors. The scam may look like a legitimate investment because early investors receive "returns." However, these returns are not derived from the operations of a legitimate business. The scammer may also use high pressure sales tactics, such as "must act now" or "won’t last long," or ask for an investor's net worth or current investments.

• Real-Life Scenario: Anderson Scott Hall orchestrated a complex scheme to defraud Duval County investors. He targeted school teachers and administrators and induced victims to transfer their retirement savings from legitimate companies to companies he controlled. Instead of investing the money as promised, Hall used the money to fund his personal lifestyle. As part of the fraud scheme, he would use money from new investors to pay returns to earlier investors. In June 2015, Hall was sentenced to 10 years in prison and ordered to pay more than $3 million in restitution to victims.

Advance Fee Scam – In this scam, the perpetrator tells a prospective borrower that they qualify for a loan but must pay a fee before an application can be processed. Advertisements and websites may be used to lure victims and are often designed to look legitimate and sound tempting. The scammer directs borrowers to pay the advance fee, which is not permitted by Florida law, on the promise of securing the loan. However, the loan never materializes and the fees are never refunded.

• Real-Life Scenario: From 2012 to 2014, Douglas Carter and James Spillers used websites to lure victims in an elaborate advance fee for loan scam. More than 100 victims paid advance fees on the promise of obtaining residential and commercial loans. However, no loans were funded. In October 2015, Spillers was sentenced to four years in prison followed by 10 years of probation. Carter was sentenced in November 2015 to 10 years in prison followed by 10 years of probation. Both men were ordered to each pay more than $114,000 in restitution to victims and nearly $10,000 in investigative, prosecutorial and court costs.

Before making a financial decision, fully research the product and the business. Make sure that the business or individual is properly licensed with the OFR. Inquire with multiple professionals before making a commitment. Request written information about the product and the agreement and be sure to read everything fully and carefully. Take the time you need to make an informed decision.

Motor Vehicle Financing

Buying a new or used vehicle is exciting, and it can be easy to get swept up by a persuasive salesperson. The OFR regulates motor vehicle retail installment sellers. The license authorizes its holder to offer installment payments to its customers, for the sale of motor vehicles to retail buyers. This license is required by firms that sell and finance vehicles such as automobiles, trucks, trailers, RV's, motorcycles, and mobile homes. Floridians can verify the license of motor vehicle retail installment sellers with OFR. Be sure you are fully informed before making a financial decision, including a vehicle purchase.

Do your homework on the vehicle, the loan product and the dealership before committing to a decision. Below are some helpful tips:

• Research the vehicle you are interested in purchasing so you understand what you would expect to pay. Make a budget and consider getting pre-approved for a loan.
• Research financial institutions, dealerships, and other lenders to help you get the best financing available to you. Preparing ahead of time will get you ready to negotiate and make the process less stressful. Shop around to make sure you get the best deal.
• When you decide on a vehicle dealer and financing, make sure the business and individuals are properly licensed. The Better Business Bureau is a great resource to view complaints about a dealership or lender.
• Get everything in writing. Read the loan contract carefully and completely – before signing it. Make sure it matches the price and terms that you agreed to.
• While monthly payments are an important aspect of the transaction, be aware of the total amount you are financing. The payments may fit your budget, but the total amount financed is also an important part of the equation.
• Ask questions if there is something you don’t understand. Don’t let yourself be rushed; take the time you need to make an informed decision.
• Once you sign the loan contract, you are obligated to those written terms regardless of what may have been said verbally.

Phone Scams

Increasingly savvy phone scammers are making it more difficult for consumers to tell what's real and what's fake when it comes to phone scams. It is important to pay attention to the clues that point to phone scams, and don’t hesitate to just hang up.

Phone scammers might tell you:

• You've been selected for a special offer or "free" product.
• You've won a valuable prize or lottery.
• This investment is low risk and provides a higher return than you can get anywhere else.
• You don't need to check our license or company with anyone.
• Ordering is quick and easy. We'll just put the charges on your credit card.

High-pressure pitches and requests for quick decisions are common tactics of any scammer. Phone scams can cover a wide range of popular schemes, including "free" travel packages, credit cards and loans, investment opportunities, fake charities, advance fee loans, payday loans, credit card protection, offers to lower your credit card interest rates, warranties and "free" trial offers.

Everyone is a potential target of phone scams. If you think you’re a victim of a phone scam or suspect that you were targeted, file a complaint with the Federal Trade Commission (FTC) online, or call 877-382-4357 (TTY: 866-653-4261).

Payday Lenders (Deferred Presentment Providers)

A payday lender provides a short-term loan in exchange for a person's check and a fee. The lender agrees to hold the check for a period of time before depositing it.

In Florida, the Florida Office of Financial Regulation's Division of Consumer Finance regulates payday lenders. You can verify a license or file a complaint on the OFR website or call (850)-487-9687, if you have additional questions.

Consumers who take out a payday loan from a licensed lender are entitled to the following protections under Florida law:

• A borrower may borrow up to $500 per loan.
• A borrower may only have one outstanding loan at any time. This is tracked through a statewide database of all loans taken out.
• The maximum fee is 10 percent of the amount borrowed plus a $5.00 verification fee.
• The loan term cannot exceed 31 days or be less than 7 days.
• Certain contract terms that limit a borrower's rights are prohibited.
• A borrower must pay a previous loan in full and wait 24 hours before entering into another loan. This period is designed to prevent loans from being rolled over into new loans and to give consumers the opportunity to consider other financial alternatives.
• If at the end of the loan term, the borrower is unable to pay the loan in full, the loan provider must provide a 60-day grace period without additional charge. The grace period is dependent upon the borrower making an appointment with a Consumer Credit Counseling Service within 7 days and completing the counseling within the 60-day grace period.

Remember, Before You Take Out a Payday Loan:

• Verify a license on the OFR website or by calling (850) Its Your Money (850-487-9687), option 1.
• Especially be careful to check the license if the payday lender is doing business online. Dealing with unlicensed Internet companies makes it difficult to resolve potential problems, and these companies may be located outside the United States.
• Be wary of other short-term products that mimic payday loans, such as installment loans, open-ended lines of credit and auto title loans, which may use automated clearing houses or electronic transfer every two weeks.
• Comparison shop for the lowest fees and penalties.
• Borrow only what you can afford to pay back.
• Know when your payment is due and be sure to repay the loan on time and in full.
• Take advantage of local non-profit organizations across Florida that are available to help you with your financial situation. Many of these organizations offer help with budgeting, credit repair, debt repayment and more. Contact your local consumer credit counseling service, asset building coalition or United Way.
• Set up a budget. Plan for the future by making a realistic budget to help avoid the need to borrow for emergencies and unforeseen expenses. Free budgeting worksheets are available on www.mymoney.gov.

Consider alternative solutions:

• Ask about delaying or making payment arrangements on your non-interest bills such as telephone and utility bills.
• Talk to a friend or family member about borrowing money.
• Ask your employer for an advance on your paycheck.
• Set aside savings each month for future emergencies.

Loan Modification

If you are facing a mortgage payment that you cannot make or if you have fallen behind on your mortgage payments, the first step you should take is to contact your lending company directly. Do not ignore the letters or phone calls from your lender. Foreclosure on a mortgage and the loss of a home is an expensive process. The longer you wait to make the call, the fewer options you will have.

Effective January 1, 2010, consumers who enter a loan modification agreement are entitled to the following protections under Florida law:

• Registration: companies and all employees conducting loan modification services must be properly licensed.
• No Upfront Fees: no upfront fees can be charged before the client benefits from the loan modification services.
• Written Contracts: a written agreement is required with specific language that explains the customers' rights under the law and lists the specific services and expectations of the contract.

The Office of Financial Regulation offers the following tips for consumers to identify potential fraud and avoid becoming a victim:

• Do your research! Check the regulatory requirements the profession adheres to and confirm the person you are working with has a professional license. Also, check if any complaints have been filed against the company or individual. Consumers can visit the OFR's public license search or call (850)-487-9687, to get current information on all OFR-issued licenses.
• Always get your agreement in writing and specify the services to be provided. Make sure you read and understand the agreement. You may wish to have a Real Estate attorney review the agreement prior to signing it.
• NEVER pay any upfront fees for loan modification services. It is illegal to charge consumers for any services until after they have been rendered.
• If you feel you have been victimized, file a complaint on the OFR website.
• Visit the Home Affordable Modification Program website for additional resources.