ACCC Explains How To Avoid Investment Fraud

ACCC provides six tips on what consumers need to do to avoid investment fraud

Boston, MA – July 15, 2019

How to Avoid Investment FraudThere are several different types of investment fraud that consumers need to be aware of. These include pyramid schemes, promissory notes, high-return of risk-free investments, Ponzi schemes, affinity fraud, and internet investment fraud. To help consumers determine actual investment opportunities from scams, national nonprofit American Consumer Credit Counseling (ACCC) offers six tips on how to avoid investment fraud.

“Rather than seek the advice of a financial expert, many Americans now invest their money on their own in a market that is complex and fast-paced,” said Steve Trumble, President, and CEO of American Consumer Credit Counseling. “The problem is that many consumers have little or no experience in making investments, which makes them more vulnerable to investment fraud.”

According to the AARP Investment Fraud Study, since 2014, the US Securities and Exchange Commission increased the number of investment fraud prosecutions by 15 percent per year. The survey also found that when it comes to targeting, 58 percent of fraud victims received at least one investment sales call per month compared to 32 percent of general investors who have not fallen victim to fraud. The FTC found that younger people were falling victim to fraud than older people, with 43 percent of those in their 20s compared to 15 percent of people in their 70s.

ACCC explains how consumers can avoid investment fraud.

  1. Research – It is important that consumers do a thorough research of the company’s business – not just reviewing newsletters or their press releases – to understand their product or service before investing.
  2. Unsolicited offers – Pay close attention to any unsolicited offers to invest in a company, especially if the consumer can’t find any financial information on it. They should be especially careful of off-shore or foreign investments, as they are harder to trace if something goes wrong.
  3. Always ask questions – Fraudsters don’t expect consumers to ask questions or do research before they invest. It’s important that consumers do their part and ask for references or where they can find more information before investing, especially if it’s unsolicited. Ask about the investment strategy and be sure it is fully comprehensible.
  4. Make confirmations – Confirm who the auditor and custodians are and that they have a good reputation. Mutual funds are more regulated than hedge funds, and historically have fewer instances of fraud. If they will not provide any of this information, it is best to avoid them.
  5. Avoid sending money fast – Fraudsters will push consumers to send money fast with a “once-in-a-lifetime opportunity” type of plug. No investment is guaranteed. Consumers should always stay away from sending money via email and investments that are sent via email, especially when unsolicited.
  6. Limit investment – Although this will not prevent fraud, being aware of how much money consumers are investing at once can limit the amount lost if something goes wrong. Even when safeguards are met, there is still a slight chance of fraud.

ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to or visit