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Investment fraud can happen to anyone

Radio Transcript, 3 minutes 5 seconds, for use during week of March 24.

Description: Susan discusses investment fraud with Craig Goettsch, director of investor education for the Iowa Insurance Division

Announcer: Invest Wisely comes to you from Iowa State University Extension through a grant from the Investor Protection trust, providing investor education on the web at: investorprotection.org.

Susan: Craig, thanks so much for sitting down and talking to me today.

Craig: My pleasure. Penny told me you have questions about investment fraud.

Susan: Well, of course, I want to avoid investment fraud. But, I like to think I’m pretty sharp. Aren’t most fraud victims people who just don’t know very much about investments?

Craig: It’s my experience that most investment fraud victims are actually quite knowledgeable about financial issues. The fraudulent sellers are simply very good at what they do.

Susan: So anyone can be a fraud victim? A family member, a friend, a neighbor?

Craig: Exactly. You really need to know what to look for, to educate yourselves continuously and always ask questions.

Susan: What’s an example of investment fraud I should know about and watch out for?

Craig: Well, one example is what are often called ‘free meal’ seminars.

Susan: Sometimes I get invitations to free educational seminars.  I haven’t been to one, but they claim they’re not selling anything. Could those be ‘free meal’ seminars?

Craig: Possibly. Many free seminars are offered by legitimate organizations dedicated to providing investment education. An invitation to a ‘free meal’ seminar may appear to be to a legitimate educational presentation, but you may find otherwise when you attend. Sometimes the organizers are pushing a book. Other times, it’s a financial product, one that may not be right for you.

Susan: How can I tell?

Craig: The claims they make may be exaggerated or misleading. Often, the risks of the product are not disclosed.

Susan: So, I may not have enough information or the right information to make an informed decision?

Craig: That’s right. And often, at these seminars, you’ll find yourself pressured to make a decision that day, before you’ve had a chance to really do your homework.

Susan: Thanks, Craig. This information is really helpful.

Craig: You’re welcome. If you have more questions, I’d be glad to talk further.

Susan: I may take you up that. Thanks! And as Penny would say, we can always visit the ISU Extension website at extension.iastate.edu and look for ‘Invest Wisely’ for more information.

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Updated March 24, 2008