Have Been Victims Of Pyramid Schemes And Affinity Fraud Investment Scams

Enter Source, Feb 10, 2005

How can you avoid being defrauded?

The easiest way to avoid being defrauded is not to participate in any promotion that appears to be a pyramid scheme. The following are some tips to help you steer clear of pyramid schemes:

Gather all information regarding the company, its officers, and its products or services. Avoid promoters who fail to explain their plans clearly and in detail. In particular, read the company's prospectus or other written material. If you don't understand it, get someone independent of the company to explain it to you.

product or service?
Is there a similar product or service on the market? If so, how well does it sell? If the promoters seem to be making most of their money by selling distributorship or large start-up inventories to new recruits, stay away.

Get all promises in writing.

Beware of promises of quick, easy and unreasonably high profits.

Resist the temptation to invest just because the people selling you the program are friends or are part of your religious or social organization.

Consumers who have been victims of pyramid schemes and affinity fraud investment scams are urged to contact the New York State Attorney General's Consumer Helpline at 1-800-771-7755 or at the OAG's Web site

The cases are being handled by Assistant Attorney Generals Elizabeth Block and Michael E. Jones of the Investor Protection Bureau under supervision of Bureau Chief David Brown IV with help from legal intern Bruce Alderman .