Your cousin Jim has a friend who called you with information on investing in one of the hottest new technology companies around. He says it's an opportunity to get in on the ground floor. It sounds legitimate, and besides, Jim is investing, and he's as honest as the day is long.
Looks like a good place to put your money, right? Not necessarily. Before you invest your hard-earned dollars in anything, investigate it. According to the Council of Better Business Bureaus Inc. in Arlington, Virginia, its affiliates receive more than 327,000 inquires on the investment industry annually, and complaints against the industry rose 46 percent from 1995 to 1996.
To provide consumers with information on investment fraud, the council has published a book, How to be an Informed Investor. The book examines different, potentially fraudulent activities--offering a description of schemes, examples of people who have been scammed and tips on what to watch for. It also discusses how to select and work with financial planners and stockbrokers.
The guide book is available from your local Better Business Bureau or can be ordered from the council for $16.95 (including postage and handling). Send a check or money order payable to the Council of Better Business Bureaus Inc., Department 023, Washington, DC 20042-0023.