Online brokerage firms saves the day from scam Brokers

 A new trend seems to be emerging in the online trading industry. Deceitful people are posing as stock brokers and they try to call middle class american people and try to sell some sort of investment opportunity. According to FINRA ( Financial Industry Regulatory Authority), more and more novice investors are falling prey to such services every day. This is just very unfortunate fact about any internet based business. There will always be scam companies which will trick you into somehow either pay them or reveal your personal information from them. FINRA has published a list of methods to avoid getting into one of these traps laid by scam artists:

 

1. ) They always hype slogans like " High returns at low risk ". Ultimate truth is that such investments do NOT exist. I repeat it is IMPOSSIBLE to get returns in the range of 50% without taking a significance risk. The risk is always higher for high return investments. Read more about bogus investment schemes from Beware of High-Yield Investment Programs

 

2.) They are not registered with SEC ( Securities and Exchange Commission ) A broker registered with SEC does not mean he can be trusted. However if a broker is not registered, definitely cannot be trusted. Stay away from them.

 

3.) Cold calling : Beware of cold callers. You do not live in a world of angels. No one will give you a million dollar idea for no cost. 

FINRA is an authority which is out there to protect investor' interests and they have following recommendations :

 

1.) Always do a background check of the broker who is calling you. Get a call back number and call back and see if it is indeed branded as the broker that called. Usually scammers will use few sets of numbers to make scam calls on behalf of various famous companies.

 

2.) Put yourself on do not call list. The probability of scam broker trying to contact you is twice if you are not on do not call list

 

3.) Make your own judgements. Family and relatives are good help. but when it is your money make your own judgement. That is why we at comparebroker recommend using cheap online discount brokers. They allow you to make your own judgement by providing trading tools. Try opening an account with E-trade or Tradeking to learn how

 

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