Town & Country Topics – SmartCheck Week

Hello! My name is Cristin Sprenger and I am an Extension Agent for Family and Consumer Sciences. Today I’m going to talk about SmartCheck Week and tips to smart investing.

U.S. Commodity Futures Trading Commission (CFTC) has announced the first-ever SmartCheckSM Week. During the week of April 6-12, 2015, CFTC staff will highlight efforts to encourage investors to check the background of financial professionals before investing their money. Through advertising, social media, and targeted outreach, the CFTC will urge investors to visit SmartCheck.gov during SmartCheckSM Week and to make this part of a routine step when considering a new financial professional and with established advisors.

CFTC SmartCheckSM is a national campaign that launched in November 2014 to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes the new website SmartCheck.gov. The website provides tools that enable investors to check if a current or prospective financial professional is licensed or registered, or if the professional has ever been subject to disciplinary action.

The website also includes information on the red flags that could signal that investors might be dealing with a fraudster and information about investing. Visitors to SmartCheck.gov can also test their susceptibility to fraudulent pitches via interactive videos that allow investors to experience a simulated investment sales pitch and decide if they wish to continue the conversation.

Investors can overlook signs that an offer is potentially fraudulent. Emotions often override an individual’s ability to make a rational choice during an investment pitch. Here are some examples of potentially fraudulent pitches to improve your investing approach. A few minutes of your time can possibly save years of regret over losses.

1. “Time is running out!”
Investors should be cautious any time they are pressured or rushed into making a decision about an investment opportunity. Is the offer described as being good for only a limited time or in a limited quantity? Are you being led to believe you are part of a special group being notified? Take time to evaluate the offer and don’t allow yourself to be rushed into making any financial decision. Most legitimate offers will be there later on.

2. “I took you out to lunch, now give me access to your portfolio.”
When the person on the other end of the trade offers to do a “small favor” for you in return for a big favor, it may be a ploy to distract you from the business at hand. It’s best to stay focused on the opportunity, not to just look for bargains.

3. “Your returns will beat the market by 10%!”
This is when a con artist dangles the prospect of unrealistic wealth, enticing you with something you want but can’t have. Consumers should consider whether the salesperson is dangling incredible returns or guarantees. It’s important to remember that all investments carry some risk.

4. “You can trust me. I’m an active member of our Neighborhood Watch.”
This is when the con artist tries to build credibility by appearing successful, claiming affiliation with a reputable organization or touting a special credential or experience. A seller may have a corner office, framed diplomas or certificates and wear an expensive suit, but appearances really can be deceiving. Learn how to check out the seller’s actual qualifications at the CFTC SmartCheck Website at http://smartcheck.gov/

5. “Everyone you and I know is investing in this opportunity.”
When someone talks about a lot of people you know investing in the opportunity and that you shouldn’t be left out, it’s probably a good idea to keep your hand on your wallet and your wallet in your pocket until you learn more.

Whether it is one of these potentially fraudulent pitches, or a normal sales call, check out the financial professional you’re considering by using the CFTC SmartCheck Website, and make sure you review them on an annual basis. Checking can help save you money and make you a smarter investor.

If you have any questions about investing basics or checking on your investment professional, please call me, Cristin Sprenger, at 540-564-3080. You can also reach me by calling the Highland County Extension office at 540-468-2225 or the Bath County Extension office at 540-839-7261.