Chapter 18. Ten Ways to Protect Your Investments and Identity Online

In This Chapter

  • Finding out about common ways investors are bilked online

  • Reducing your chance of being defrauded

  • Using the Internet to research investments and brokers

  • Determining where you can complain if you've been defrauded

Promising a big return to investors is kind of like waving red meat in front of a salivating tiger. Even educated investors can't help but bite when offered what seems to be a plausible chance at winning big-time returns. Investors' innate craving for that big score makes them easy targets for less-than-honest financial snake oil salesmen.

It's always been amazing to me how people are so careful about their money in everyday life but let their guard down when it comes to investing. The same people who clip coupons and shop at discount stores to save a few bucks will readily hand over their life's savings to a stranger with dubious qualifications selling questionable investments.

It's up to you to do your homework when checking into any investments. Online tools make it easier than ever to sniff out unscrupulous people hawking investment products. Unfortunately, though, the Internet is also a boon for the bad guys. E-mail lets fraudsters reach millions of users with the click of a button. Fraudsters can also glean basic information about you online, perhaps from your blog or Facebook page, and craft a pitch that seems more realistic and personable. Keeping these things in mind, this chapter points ...

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