U.S. News and World Report has provided seven suggestions for avoiding financial product scams. While there are plenty of great opportunities out there, these tips might make the difference in saving you from a scam.
1. Never say yes immediately
Think through your decision instead of signing up immediately when you hear about something that sounds like a great idea.
2. Be skeptical
Ask plenty of questions. Don’t feel pressured to make a decision until you are completely satisfied with the answers you are given.
3. Ask the same questions in different ways
If the person you are speaking to is telling the truth, their answer will not change. By changing the wording of your question, you have a better chance of understanding exactly what you are getting yourself into. The more times you ask the question, the more information you will be given regarding the question.
4. Figure out intentions
Will you decision have financial consequences for the other party? Advice from a person that will benefit from you signing up is not the free from bias advice you should be seeking. A person that will benefit from your action is not the best person to receive advice from.
5. Find a sounding board
Speak to as many informed people as possible. Each person can give you input from a different perspective and better prepare you to make an optimal decision.
6. Find at least one alternative
Compare a potential investment to other similar opportunities once you decide it is something you want to do. While the investment might be a great idea, there could be another company offering a competitive solution that will work even better for you. If you decide your original solution is the best, you can rest easy knowing you made your comparisons.
7. Thank the person who gave you the suggestion
If you decide the investment is worth your while, take the time to thank the person who passed the information your way. As long as you are benefiting from it, other people making money off of your decisions is OK.