The Ego, The Market, and The Mania

From the Denver District Attorney’s Office:

As we know, awareness is an important first step toward reducing your exposure to frauds and scams.  This list includes warning signs to look for, as well as safeguards to consider:

ID Theft: All personal and financial information such as credit cards, checks and ID’s containing Social Security numbers should be kept in a travel pouch when out and about. Never leave your purse or billfold in your car. Shred all financial documents you wish to discard, and mail bills directly from the post office. Never give out personal or financial information over the phone or through email, unless YOU initiate the contact.

Investment Fraud: Be wary of claims of “guaranteed”, or “high” rates of return, and thoroughly check out all offers. Don’t be rushed into a decision. Make certain the security you’re interested in is registered, and the license of your financial advisor is up to date. Carefully review your financial statements and look for signs of unauthorized or excessive trading.

Sweepstakes, Lottery Scams: Chance winnings don’t just happen – you must “pay to play” a lottery by purchasing a ticket in advance. Likewise, you must enter a sweepstakes in order to win. Beware of any email or call claiming you have won, but must first wire money to cover taxes and fees. The latter is illegal in Colorado.

Door-to-Door Fraud: Never do business with door-to-door contractors who use high pressure, or scare tactics to close a deal. Beware of bargain-price offers on “left-over materials” and don’t let strangers into your home, no matter who they claim to be. City inspectors do not go door-todoor, and reputable businesses have no need to. Always get three bids when considering home improvement work.

Caregiver Fraud: If you, or a loved one receives care from a caregiver, stranger, or family member, or if you have a representative payee, power of attorney or other advisor who manages your finances, insist on receiving copies of all financial statements. No matter how much you know, love or trust a person, never sign documents you have not read or do not understand.

Denver DA’s Fraud Line: 720-913-9179

From the Office of Denver District Attorney Mitch Morrissey:

The situation in Haiti is tragic and will require tremendous resources from the Federal government as well as individuals. This is a good time to remind ourselves of important safety measures related to disaster relief donations. Internet users who receive appeals to donate money in the aftermath of the earthquake in Haiti or other disasters should be cautious and use due diligence before responding to requests.

• Do not respond to unsolicited incoming e-mails, and NEVER click links contained within those messages;
• Make contributions directly to disaster response organizations rather than to individuals representing themselves as victims or public officials asking for donations via e-mail or social networking sites;
• To make a contribution contact disaster relief organizations directly using information found via an independent source, such as a phone book or 411, rather than following a purported link to the site;
• Verify the legitimacy of nonprofit organizations by utilizing various Internet-based resources, such as www.give.org and www.charitynavigator.org;
• Make contributions directly to recognizable organizations rather than relying on others to make the donation on your behalf to ensure contributions are received and used for intended purposes;
• Be cautious of e-mails that claim to show pictures of the disaster areas in attached files – these files may contain viruses;
• Never give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.

Denver DA’s Fraud Line: 720-913-9179

FRAUD ALERT!
From the Office of Denver District Attorney Mitch Morrissey
Top 10 Scams and Rip-Offs of 2009 from the BBB
…to be continued in 2010

1. H1N1 Scams: Scams attempted to scare consumers into purchasing cures or providing essential information to prevent the H1N1 virus.
2. Memorabilia: 2009 provided many opportunities for scammers to sell memorabilia and collectibles at inflated prices.
3. Weight Loss Pills Free Trial Offers: Free trial offers for weight loss pills actually ended up costing unsuspecting consumers thousands of dollars.
4. Phishing E-mails: Phishing e-mails appearing to be from government agencies popped up in in-boxes. These phishing emails attempted to trick victims into divulging sensitive financial information.
5. Mystery Shopping: Consumers were told they would be paid to secretly shop in order to evaluate merchants’ customer service. In some instances, victims were asked to wire money back to scammers as a way to evaluate money wiring services such as MoneyGram and Western Union. Victims who participated were sent authentic looking checks which, when cashed left the victims “holding the bag”.
6. Lottery Scams: Victims received bogus letters or phone calls informing them that they had won millions of dollars. Unfortunately, victims were also told they had to wire hundreds or thousands of dollars back to the scammers to cover taxes or other bogus fees.
7. Friend/Family in Distress: Also known as the Grandma Scam, victims received messages from scammers claiming to be “friends” or “family members” needing immediate help. Victims were asked to wire money to pay for lawyer’s fees or to post bail.
8. Mortgage Foreclosure Rescue/Debt Assistance: Victims paid upfront fees to avoid home foreclosures or to get help with credit card debt – with no results.
9. Job Hunter Scams: Job seekers paid bogus upfront fees as part of an application process. Job applicants were also asked to provide personal financial information or social security numbers under the guise of evaluating their applications.
10. Robocalls: Thousands of people received automated telephone calls related to auto warranties and lower credit card interest rates.

Questions or assistance related to fraud: Denver DA’s Fraud Line: 720-913-9179
Follow us on Twitter @DenverScamAlert
December 2009

This is from Dimensional Fund Advisors – on the Fama French Forum.  A video with Professor Fama outlining the benefits and limitations of efficient markets.  I recommend watching this video.  

DFA’s Weston Wellington at his best – sizing up the markets and making comparisons.
If you have some time, I highly recommend viewing his video series.

http://www.dfaus.com/share/whatshou/

Traveling con artists are in metro Denver. These con artists arrive every spring with door-to-door roofing, paving and other scams, intimidating the consumers into paying thousands of dollars for poor quality work. “There is absolutely no reason to do business with people who come to your door and never let strangers in your home,” says Denver District Attorney Mitch Morrissey.

How to Recognize Door-to-Door Con Artists

• They peddle roofing, paving, and other repair work door-to-door.
• They often prey on the elderly using friendly, high-pressure tactics.
• They may say they have material left over from a previous job, or insist they did work for you or a neighbor before.
• They quote bargain prices, but demand much more after the job is complete.

To Protect Yourself from Door-to-Door Scams

• Don’t do business with door-to-door contractors – even if they promise to do the work for bargain prices.
• Get at least three bids on work, and don’t always choose the lowest.
• Insist on a written contract and don’t be pressured into paying more or doing additional projects.

Need help or have a question? Call the Denver District Attorney’s Fraud Line: 720-913-9179

I don’t know about you, but I am tired of the financial media making “good copy” from “bad news.”  They’ve been suggesting for the past 12 months that the recession we are experiencing is like the Great Depression.  I think this article puts it in a new perspective.

CNN – Recession or Depression

The recent scandals ripping through Wall Street and Main Street have awakened a few.  As new regulations and regulators aim to takeover our financial systems, one cannot help but wonder “Who Will Guard Your Nest Egg?” Jason Zweig discusses this concept in his article of the same name.  

Dimensional Fund Advisor’s David Plecha gives us an overview of the Credit Markets and a history of how we got to this point - http://www.dfaus.com/library/videos/current/