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20 Questions to Ask Your Con Artist

Written By: William Cate

20 Questions to Ask Your Con Artist By William Cate

There are tens of thousands of boiler rooms in America selling gullible investors every possible swindle in the world. If you invest, you will lose your money. These scams take American investors for billions of dollars a year. Regulators do little to stop these confidence games. They do nothing to recover the victims’ money. Your best response to a cold call about investing in anything is to hang up. If you aren’t the type of person who easily hangs up on callers or you just enjoy the fun of upsetting a swindler, here are 20 Questions that will get your caller to hand up on you.

1. At the point that your caller indicates that he or she wants to talk about your investing money in anything, your opening question should be: “I’m recording this call so that I won’t miss anything. I assume that you won’t mind. Is that correct?

2. Your next question should be to ask the caller his or her full name, the name of the company, the mailing address of the office and their phone number. Also ask for the full names of the firm’s officers and directors.

3. Ask your caller if the firm is a member of the National Association of Securities Dealers (NASD) and if the caller is a registered representative with the NASD.

4. Ask the caller where the firm’s investment proposal has been registered. Get the name and address of the State or Federal Agency.

5. Ask your caller where they got your name. Usually the reply is some version of a “a list of savvy investors.” Say that you want to thank the company when you make money from their referral and so you need their name, address and phone number.

6. Ask about the risks involved in the proposed investment. There is no investment that is risk-free. Nothing is a sure thing.

7. Ask for the proposal in writing.

8. Tell the caller that the written proposal has to be reviewed by your attorney or accountant. The swindler’s usually response is to ask something like “can’t you make up your own mind.” Your reply should be even the President of the United States has advisors and your are just following his example.

9. Ask for the name of the firm’s bank and auditors. And request that letters of reference be included with the written proposal from them.

10. Ask if the investment is publicly traded and, if so, where.

11. Ask how long the company has been in business.

12. As part of that written proposal they are now mailing you, ask that it include a track record for the caller and for the company on their past investment advice

13. Ask when and where you can meet with a representative of the firm in your area.

14. Ask your caller exactly where will your money be held and will it be held in a segregated account at that bank, S&L, etc., and how often routine audits are performed on the firm’s client accounts.

15. Ask what commissions the caller is paid for the clients they recruit into the program and does the caller participate in the program’s profits earned by you. Also request that this information be included in their written proposal that they are sending you.

16. Ask your caller how you can recover your risk capital, if you decide later that this is an unwise investment for you. Request that this information be included in their written proposal being sent to you.

17. Ask your caller how the firm resolves disputes with a client.

18. Tell your caller that upon receipt of their written proposal, you intend to undertake a Due Diligence investigation of the firm and its principals. Ask if there is any negative information that he or she may be aware of that would discourage you from investing in the firm’s investment proposal.

19. Ask your caller if he or she has invested in this program. If the answer is “yes” which would be the standard Con-Artist reply, ask that proof of their investment be included in the firm’s written proposal to you.

20. Ask your caller if there are any articles about the caller’s firm in any known U.S. publication. If the answer is “yes” ask for the name of the publication and the date the article appeared.

Odds are your caller will hang up long before you have asked all these questions. If not, the odds are slim that you will be mailed a written proposal and meet with a representative of the firm. However, some over-confident Con-Artist may go this far with you. In that case, undertake a serious Due Diligence investigation of the investment proposal and abide by these few rules.

1. Never be in a hurry to send your money anywhere. If you aren’t being given at least a week or two to think about investing, don’t invest. 2. Never send money to anyone that you don’t know and haven’t met. 3. Be certain that the proposed investment has a very favorable risk/reward ratio. 4. If you don’t understand something about a proposal, ask questions until you clearly understand it.
About the Author

He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] You can email Mr. Cate at: Beowulfinvestments@Earthlink.net

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