BBB and FINRA Foundation Team Up to Help Stop Investment Scams
The largest foundation in the United States dedicated to investor education has teamed up with one of America’s most trusted consumer protection organizations to launch a new consumer website, BBB Smart Investing. The joint venture combines the Better Business Bureau’s 104 local-outreach operations with the FINRA Investor Education Foundation’s expansive knowledge of investment schemes to offer consumers better access to the tools and information that fight fraud.
"Consumer financial fraud is a serious problem in North America. According to the Federal Trade Commission and the Canadian Anti-Fraud Centre, consumers reported losing more than $1.5 billion to all types of scams in 2011," wrote the organizations in a new release.
"FINRA Foundation research has found that investors are overconfident in their knowledge of financial management, particularly baby boomers, who are most often the target of investment scams."
"A telephone survey found that 92 percent felt ‘somewhat’ or ‘very’ confident about managing their finances, with almost 80 percent describing themselves as ‘somewhat’ or ‘very’ knowledgeable about investing. But only 44 percent got a passing grade on a basic financial literacy knowledge test. BBB Smart Investing hopes to help change that."
The newly launched website includes links to a wide variety of free investor tools, includingFINRA’s enhanced BrokerCheck, FINRA’s Fund Analyzer, a 12-question risk assessment, and a four-question "scam meter." It also offers a number of investor education articles and step-by-step instructions on how to research investments and financial professionals.
"This is a great partnership," says Carrie Hurt, President and CEO of the Council of Better Business Bureaus. "Even though BBB has always investigated investment scams, this gives us a whole new portfolio of prevention tools to offer to consumers. The FINRA Foundation's basic 'Ask & Check' message is exactly what consumers need to hear before they make investment decisions. We think this program will go a long way toward preventing investment scams that have become so much more prevalent in recent years as people more actively manage their own retirement funds."
Other recent BBB investor protection efforts have included releasing tips on how to avoid religious-based affinity fraud, unveiling strategieson how to prevent investment fraud, and sponsoring investor education seminars in cities throughout the United States.