Online
Investment Opportunities: 'Net Profit or 'Net Gloss?
Washington, DC - When
it comes to investment opportunities on the World Wide Web, keep a watchful eye. The Web
has many legitimate investment opportunities, but it also plays host to some unscrupulous
players. Unfortunately for potential investors, sometimes it's tough to tell the
difference.
Some fraudulent investment promoters fool
visitors through web sites that make their "investment company" look like a
solid, top-rated Wall Street investment firm. Other fly-by-night companies can feature
slick-looking web sites that use graphics, audio and even video clips. Still others pique
your curiosity with messages on Usenet groups that promise big profits and direct you to
call or e-mail for more information. When you respond, you'll hear:
offers of a "ground floor
opportunity" for you to realize a better return on the investment than any other
you're involved in
guarantees of big profits in a short time
claims that minimize or mask the risk
involved
lots of pressure to act now because the
"market is moving."
Before you respond to any online investment
opportunities, the Federal Trade Commission says to look for these signs of a company that
may not be on the up-and-up:
"THIS INVESTMENT IS IRA
APPROVED": Some online investment opportunities may claim that their
investment has been "approved" for your IRA. Don't believe it. The IRS does not
"approve" investments for IRAs.
"OUR WEB SITE WILL MATCH YOU
WITH INVESTMENT OPPORTUNITIES": "Matchmaker" web sites offer to
find investment opportunities that appeal to your unique interests. Ask questions. Get
satisfactory answers. Do the operators of the web site disclose their identities and
affiliations, if any, with the investments they're touting? Do they insist on their fee
before they allow you to view their list of offerings? Who are you dealing with? Get
detailed information about the company, be wary of any up-front fees, and keep your bank
account information to yourself.
"OFFSHORE INVESTMENTS ARE
TAX-FREE AND CONFIDENTIAL": When the company behind the web site claims to
be located offshore or offers an "offshore, tax-free" investment, get a second
opinion from someone you trust - your attorney, financial advisor, or accountant - who is
knowledgeable about the tax implications of "offshore" investments.
"SUBMIT YOUR FINANCIAL
INFORMATION ONLINE": Some web sites may ask you to submit personal financial
information online to determine whether you're an "accredited investor." In
addition to your name and e-mail address, you may be asked for your income level, bank
account information, Social Security Number and other personal information. Sometimes,
this is a ploy to develop a "lead list" of potential investors. In any case, be
very careful before you submit any personal information online. Before you do, visit the
site's privacy policy. It should tell you what personal information the site collects and
how the information is used.
For more information about investing on the
Internet contact the following organizations:
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580
202-FTC-HELP (382-4357)
202-326-2502 (TDD) |
North American Securities Administrators Association, Inc.
10 G Street, NE
Suite 701
Washington, DC 20002
202-737-0900 |
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
202-418-5000 |
National Association of Securities Dealers
1735 K Street, NW
Washington, DC 20006-1500
202-728-8000 |
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
202-942-7040 |
National Association of Investors Corporation
PO Box 220
Royal Oak, MI 48068
248-583-6242 |
Employee Benefit Research Institute |
The Motley Fool |
Alliance for Investor Education |
The Online Investor |
invest-o-rama |
Pathfinder.com
Fortune.com
Money.com |
National Fraud Information Center |
Small Business Administration |
American Savings Education Council |
InvestorGuide |
InvestorWords |
fination.com |
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
|
FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
|
December
1998 |