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Week of February 27th, 2017: The top 5 scams to watch out for

February 27th, 2017

Week of February 27th, 2017 – The top 5 scams to watch out for

The IRS, The North American Securities Administrators Association (NASAA) and the National Council on Aging (NCOA) has our back. They’ve partnered with local law enforcement agencies to bring to light the most onerous scams and to catch the bad guys. We have selected from their top scams: Our top 5.

  1. Impersonating an IRS agent: Usually scammers will try to intimidate you by threatening arrest, deportation, license revocation, liens and other threats. Remember, please, the IRS always sends a “skinny letter”, as local CPA likes to say.
  2. Preparer Fraud – there are some preparers that set-up shop each tax season just to scam folks: from stealing your identity to stealing your tax refund.
  3. The Grandparent Scam – You guessed it, the scammer calls and pretends to be your grandchild: “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of the grandchild the scammer most sounds like, the scammer has established a fake identity without having done a lick of background research. Once “in,” the fake grandchild will usually ask for money to solve some unexpected financial problem (overdue rent, payment for car repairs, etc.), to be paid via Western Union or MoneyGram, which don’t always require identification to collect. At the same time, the scam artist will beg the grandparent “please don’t tell my parents, they would kill me.”
  4. Property Tax Scam – You get a letter addressed from the Tax Assessors Office. The letter which contains public information, is made to look official, offers the homeowner, for a fee, to arrange for a re-assessment of the property’s value. Promising of course, a lower tax burden.
  5. Promissory Notes – Most promissory notes are legitimate and a means by companies to raise funds. However, short -term promissory notes, with terms of less than nine months do not have to be registered with the SEC (they are exempt). These types of notes are most often used for these scams. Be very wary on anyone offering high return short-term notes which are touted as “risk-Free”, “Insured” or “Guaranteed”. “Investors in Georgia lost more than $2.5 million in a ‘risk-free’ investment after purchasing promissory notes that would pay for new ambulances for a start-up company. There were never any ambulances, only worthless notes that generated high commissions for the sellers.” *

The number of scams you are likely to run into is endless. A little common sense goes a long way as does the “smell test”- if it smells fishy it’s probably not a rose. If in doubt call us, we can usually call on multiple resources to help you determine if something you are being offered is legit.

Our portfolios strategies generally reflect overweighed exposure to Domestic Equities.

Carlos Dominguez, CFP® – Portfolio Manager


Sources: https://www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors/, https://www.nasaa.org/5232/nasaa-identifies-top-10-investor-traps/, https://www.irs.gov/uac/newsroom/irs-wraps-up-the-dirty-dozen-list-of-tax-scams-for-2016, * https://www.nasaa.org/wp-content/uploads/2011/08/Promissory-Notes-Brochure.pdf


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