Let’s face it – today’s economic situation is scary. Having entered into a full-blown recession people are more worried and afraid than they’ve been in years. Job loss and other recession-centered threats more and more people are looking for ways to make more and sometimes turn to methods that end up making matters worse. That’s why, in these current financial times, it’s important to beware of scammers, as hard times bring out more schemes to take advantage of consumers’ fear and desperation. To help avoid going after rip-offs, follow these important tips:

1. Remember there is always a direct correlation between return and risk. If you are presented with a high return option of more than 10 percent return per year, keep in mind that this option is also going to be ultra risky.
2. Beware of unsecured promissory notes – whatever the promissory note purports to be, it should be protected by a recorded trust deed with your name on it; if not, then it’s most likely a fraud.
3. Be wary of securities scams involving foreign currency trading (or FOREX) – FOREX is a legitimate business that trades more than $1 trillion every day, but a number of scammers center on it, pushing their “proprietary” trading methods and arranging to use your money and then split the proceeds. Many of these scammers will make money in the first few days of trading to help build your confidence in them, then when they lose, take your money and use it to pay back someone else they have scammed.
4. Be cautious of banking-related schemes that offer higher returns than normal.
5. Beware of equity stripping schemes – these scams involve borrowing more than something is worth (such as a house or car) and investing the difference in an item that promises high returns.

Any opportunity you are presented with should be checked out before you invest in it – not after, when things might be skeptical, do your homework, and always ask for lots of documentation. Do background screenings on any investment “guru” who promises to make you money if you give him or her money. Call the securities division for your state and ask for information on the person making you offers. When times get tough and cash seems scarce, the first and best place to go is not to a “get rich quick” scheme promising easy money. The best place to go is to your own Spending Plan to see where you might be wasting money that can be used more efficiently. As you track your spending, you will get in better control of your finances, which will calm fears and eliminate the temptation to look for money where it does not exist. What most people need to meet their obligations they usually already have sitting in a Spending Plan and only need to live by it to discover the money they need. The happiest people we know are those who have a Spending Plan, are tracking according to that plan and have secured their money in a safe place that brings them consistent, yet modest returns.

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