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6 Steps to Take after Discovering Fraud

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Article: 6 Steps to Take after Discovering Fraud

You just realized you were scammed. That trade or investment you made was a fraud. Now what do you do?

The sooner you take action, the better you can protect yourself and help others. Getting all of your stolen money back may prove difficult, but recovery is about more than just regaining your losses. These six steps can help you guard against further theft, report the fraud, and start the recovery process. They are for informational and educational purposes only and should not be considered legal or investment advice or a comprehensive list of solutions. You can also conduct these steps on your own at little or no cost. However, if you feel you need legal help, consult an attorney.

Your first steps should focus on stopping further losses and gathering the information you have about the scheme and the perpetrators while it is still fresh. Then, report the crime as soon as possible. The sooner you report, even if you think the matter is insignificant, the easier it’ll be for authorities to track down the fraudsters or stop others from being victimized. Next, look into how you can repair the damage and avoid fraud in the future.

1. Don’t pay any more money

This may sound obvious, but some schemes use the promise of large returns to persuade victims to send one fee after another, even when the victims suspect something is wrong. These fee frauds have increased significantly online in recent months. Typically, legitimate brokers will deduct fees and commissions from your account, and not demand more money to release your earnings or principal. U.S. brokers will never withhold or collect taxes.

Also, be on the lookout for recovery frauds. These frauds target recent victims and claim to be able to get the stolen money back if the victims first pay an upfront fee, ‘donation,’ retainer, or back taxes. The perpetrators of these advance-fee frauds often pose as government officials, attorneys, or recovery companies. Learn more about the warning signs of recovery frauds.

2. Collect all the pertinent information and documents

While the events are still fresh in your memory, develop a timeline and collect documents and information that could help when it comes time to report or investigate the fraud. Write down conversations you had with the fraudsters with the approximate dates and times they took place. Documents and information to collect and keep include:

Resolution when Working with Registered Entities


If problems arise with an individual or firm registered with the CFTC, customers can seek help through the CFTC Reparations Program or NFA arbitration process.


The BASIC Database operated by the National Futures Association provides information on registration and details about registrants, including disciplinary histories.

  • Names, titles, or positions used by the fraudsters.
  • Social media profiles, group posts, chats, or other online interactions.
  • Website addresses and screen shots.
  • Emails and email addresses. Save these electronically, or print them out with the full header information. (Your email provider or a web search can describe how to capture header information.)
  • Phone numbers you used to contact them.
  • Account information, statements, trade confirmations, disclosures, and sales materials.
  • If credit cards were used, include the receipts or statements.
  • Exchanges of digital currencies, such as bitcoin.
  • Records of other forms of payment including cancelled checks or receipts for wire transfers, money orders, or prepaid cards.
  • Any correspondence received, including envelopes.

3. Protect your identity and accounts

If you provided payment information to the fraudsters, take the steps necessary to block access to your accounts and protect against identity theft.

  • Credit cards. If you used credit card information in the fraudulent transaction, contact your card issuers immediately to make a fraud report. As part of the process, you may be required to get a new account number.

You may also want to contact one of the three national credit reporting companies (below) and ask that it place a fraud alert on your credit file. The credit reporting company you contact will automatically report the fraud alert to the other credit reporting companies. A fraud alert will notify potential creditors to verify your identity before extending additional credit in your name. Placing a fraud alert is free and typically lasts up to one year or until you ask for it to be removed.

You can also request a free security freeze. A security freeze restricts access to your credit file, making it harder for identity thieves to open accounts in your name. You will have to contact each credit reporting company to place a freeze. A security freeze will not be lifted unless you request it.

  • Bank automated clearing house (ACH) information. If you gave the fraudster your bank account number or routing number, contact your bank or credit union immediately. You may need to close the account and open a new one.
  • Social security number. Go ahead with a fraud alert or credit freeze and report your information stolen at the FTC’s identitytheft.gov website. Be on guard for scams that claim your social security number is linked to back taxes or other debts. Independently verify claims with the IRS or creditors before paying any money.
  • Log-ins and passwords. If you registered for access to a fraudster’s website using usernames or passwords that you use elsewhere, be sure to update accounts with new log-ins as soon as possible.
  • Other steps to protect your identity. If you experience identity theft, you can report it and get further recovery steps at identitytheft.gov.

Two Ways to Submit a Complaint to CFTC


You can submit violations of the Commodity Exchange Act or CFTC regulations by filing a whistleblower Form TCR or a Complaint Form.


Form TCR – Individuals who submit a Form TCR receive privacy, confidentiality, and anti-retaliation protections under the Commodity Exchange Act and may be eligible for monetary awards. Whistleblowers can file a Form TCR anonymously but must provide a way for the Division of Enforcement to contact them. Learn more about becoming a whistleblower.


Complaint Form – If you don’t wish to be eligible for a potential award and receive anti-retaliation protections, you can report information electronically to the Division of Enforcement on a Complaint Form or by calling us toll-free at 866-FON-CFTC (866-366-2382).

4. Report the fraud to authorities

Tell us if you believe you were victimized by a fraud that involved commodity futures, options on futures, swaps, commodity pools, binary options, foreign exchange, digital assets, or other derivatives.

If you have experienced other types of fraud and don’t know where to send your complaint, the Department of Justice has a directory that can help. Also, federal agencies work closely together and will forward your complaint to the appropriate agency.

If the fraud occurred in your local community, you could also report the matter to the police and your district attorney. You may need to file a police report if you plan to file an insurance claim for fraud losses.

Also contact your state financial regulator or attorney general. State authorities may choose to bring actions in state court.

5. Check your insurance coverage, and other financial recovery steps

  • Fraud theft insurance. Check your homeowner’s policy to see if it includes coverage for fraud losses or reimbursements for identity theft related expenses. It may be limited to your principal investment and not expected profits, or it may cover only expenses incurred to fix problems caused by the identity theft.
  • Consider consulting a tax professional. If you can itemize deductions on your personal income tax return, fraud losses may be deductible in the year the fraud was discovered. Calculating the deduction can be complicated and certain exceptions may apply. For more information, see IRS Publication 547, Casualties, Disasters, and Thefts, and other resources for investment fraud victims from the IRS.
  • Consult a financial counselor or advisor. Losses to retirement savings or that caused significant debt may require the help of a professional financial advisor. Beware of credit repair companies that promise to significantly erase your debt. A financial advisor can help examine your current situation and provide a path to rebuild savings, reduce spending, minimize interest expenses, or identify other possible sources of income.
  • Recovering money lost to fraud. If you want to consult a lawyer or company to recover money lost to fraud, be sure to ask what services will be provided, the costs involved, how you will be charged, and get all of the answers in writing. Check with your local bar association to ensure attorneys are licensed in your state or if they have a history of complaints. Be aware that, in many cases, asset recovery companies charge high fees to do little more than send a demand letter to the original fraudster and a boilerplate complaint to the appropriate regulator. If the scammer is insolvent, the demand letter will do little good, and you can submit complaints to government regulators at no cost.

6. Consider changing behaviors and building your resistance to fraud.

As the saying goes, ‘fool me once shame on you, fool me twice shame on me.’ Don’t blame yourself for being victimized. Fraudsters are very good at what they do, and they often target educated and successful people. However, you may want to consider the events or actions that led up to the fraud. Many times, routine activities can lead people into becoming targets, and returning to those activities could start the process over again. These routine activities could include being active in investor social media groups or chat rooms, commenting on videos, signing up for trading courses, special offers, free giveaways, or investor newsletters.

While the exact numbers are unknown, because fraud is commonly underreported, victims tend to be victimized more than once. Recovery frauds, mentioned above, commonly start from victim lists sold on the dark web. Your personal details and vulnerabilities may be sold to other scammers. One of the best ways to build your resistance to fraud is to stay informed. Here are some Do’s and Don’ts to help you avoid fraud again.

Do:

  • Do verify the registration and disciplinary history of any broker, adviser, or trading platform with the CFTC, NFA, SEC, FINRA or the appropriate state regulator before doing business with them. While registration alone cannot protect you from fraud, most frauds involve unregistered individuals, entities, or products.
  • Stay current on the latest frauds and schemes by monitoring credible sources such as state and federal government or law enforcement agencies, including the CFTC, SEC, Department of Justice, FTC, the Consumer Financial Protection Bureau, FINRA, National Futures Association (NFA), your state securities regulator, or attorney general’s office.
  • Get a second opinion from a trusted adviser, family member, or friend before making an investment. Seeking advice from someone you know and trust is good way to slow down a sales pitch and avoid fraud.
  • Let unknown callers go to voicemail or have a refusal script ready to end cold calls quickly. ‘I don’t participate in phone solicitations,’ then hanging up, works just fine.
  • Delete-don’t open-unsolicited email. Often, opening an email will signal a spammer that the email account is active and more spam will follow.
  • Verify business addresses by doing an online map search and looking at the location using the street-level view. Many fraudulent websites will use fake addresses, which can be easily spotted with a virtual visit.
  • Review privacy settings on social media platforms and conceal or delete information that pinpoints where you live, where you went to college, what you do for a living, where you trade or bank, how often you invest, etc. Personal information can easily be pieced together by fraudsters and used to target you for future schemes.
  • Check email addresses carefully to avoid phishing attacks.
  • Learn about the common persuasion tactics fraudsters use.

Don’t:

  • Don’t respond to unsolicited sales calls or email.
  • Don’t give credit card, payment information, or personal information over the phone, in an email, or to a website that is sent as a link in an email. Fraudsters often pose as financial service professionals or government officials. Instead, end the call or close the correspondence, and look up the customer service contact information on your own.
  • Don’t fund trades or investments by wiring money, sending prepaid credit or gift cards, using digital assets such as Bitcoin, or making other unusual forms of payment.
  • Don’t communicate using encrypted messaging apps with ‘brokers’ or others promising to make you money. These apps provide global access and hide the true location of the person on the other end. You could easily be dealing with an offshore fraudster posing as a person in the United States.
  • Don’t trade or invest in vehicles you don’t fully understand. If you can’t explain it, you probably shouldn’t invest your money in it.
  • Don’t engage with people promoting investments or trading schemes on social media. Especially don’t engage with people who promise they are ‘legit’ even though all the others are scams.
  • Don’t trade or invest with unregistered entities or individuals that operate outside the United States.
  • Don’t engage with people you are introduced to through third parties or organizations. Affinity fraud targets people through social groups and use those connections to build credibility. Places of worship, professional organizations, service organizations, and others are common targets for affinity fraudsters.

Additional resources

Disclaimer

CFTC – U.S. Commodity Futures Trading Commission published this content on 20 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 July 2020 19:45:16 UTC

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Dustin Aab on the power of working hard to achieve success

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The more closely we look around us, the more we get nearer to reality where so many individuals work with a certain grit, commitment and dedication to achieve what their hearts desire.

These individuals are the ones that not only work to attain their set goals in their career but also help others in their journeys. Talking about the sales and consulting business, which is growing each passing day across nations as professionals from various industries aim to get nearer their visions and aspirations in business, we can notice the boom in this niche; thanks to professional entrepreneurs like Dustin Aab.

Based out of California, Dustin Aab is a leading American entrepreneur, who excels in sales and consulting and has been shaping the careers of hundreds of people through his astute skills and knowledge as a true professional in the industry. It was seven years ago that Dustin Aab had started his career in the sales arena and from the past six years owns his sales company, under which he is working with the mission to turn the desires and dreams of professionals into reality through his mentorship and coaching in sales.

Dustin Aab’s sales and consulting business is all about providing the best of the industry products and services that help individuals change their financial status and situation. His life has been full of challenges, but Dustin Aab very early had realized the power of working hard and putting in every possible effort to make a successful career; hence, after working so hard for years, he has been able to create the financial freedom he wanted by becoming an entrepreneur. He hopes to change as many lives as he can in his career and take people nearer to their definition of success. He does sales mentorship and consulting for not just individuals, but companies as well.

Some of the specific services he offers through his company include Real estate, amazon automation, sales training mentorship, credit repair, Instagram growth and branding, life insurance and solar.

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Dustin Aab on the importance of achieving financial freedom in life | Personal Finance News

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The more closely we look around us, the more we get nearer to reality where so many individuals work with a certain grit, commitment and dedication to achieve what their hearts desire. These individuals are the ones that not only work to attain their set goals in their career but also help others in their journeys. Talking about the sales and consulting business, which is growing each passing day across nations as professionals from various industries aim to get nearer their visions and aspirations in business, we can notice the boom in this niche; thanks to professional entrepreneurs like Dustin Aab.

Based out of California, Dustin Aab is a leading American entrepreneur, who excels in sales and consulting and has been shaping the careers of hundreds of people through his astute skills and knowledge as a true professional in the industry. It was seven years ago that Dustin Aab had started his career in the sales arena and from the past six years owns his sales company, under which he is working with the mission to turn the desires and dreams of professionals into reality through his mentorship and coaching in sales.

Dustin Aab’s sales and consulting business is all about providing the best of the industry products and services that help individuals change their financial status and situation. His life has been full of challenges, but Dustin Aab very early had realized the power of working hard and putting in every possible effort to make a successful career; hence, after working so hard for years, he has been able to create the financial freedom he wanted by becoming an entrepreneur. He hopes to change as many lives as he can in his career and take people nearer to their definition of success. He does sales mentorship and consulting for not just individuals, but companies as well.

Some of the specific services he offers through his company include Real estate, amazon automation, sales training mentorship, credit repair, Instagram growth and branding, life insurance and solar.

(Disclaimer: This is a Brand Desk content)

 

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Home Depot, Inc. (The) (NYSE:HD), J P Morgan Chase & Co (NYSE:JPM) – Key Markets To Watch As The Mortgage Boom Continues To Fade

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The last year has seen the most eye-popping spike in value in history. 

While the Covid 19 pandemic initially shut down economies across the globe, the Work from Home movement caused a mass exodus away from metropolitan areas where many large companies are headquartered.  Homebuyers have been laying siege on the housing market to the point where houses in the most desirable locations are selling for more than 50% above the asking price in some cases.

This current trend is all thanks to the Fed lowering interest rates last year in response to the pandemic to help bolster the economy. 

Lowering the interest rate allows banks to charge less interest on consumer mortgages.  When mortgages are cheaper, it may entice would-be home buyers to jump on opportunities, but it also gives current homeowners the ability to re-finance (re-fi) and pocket the cash to use elsewhere.  While this was the intended response, the side effects of cheap access to money led to an immense spike in demand for mortgages.

Regarding the demand for houses from new home buyers, there is a potential for the steam to run out of this drive because buyers are being priced out of opportunities. This is partly due to the massive supply and demand imbalance and partly due to raw materials for new houses such as lumber adding so much to the price of a new house, which eventually dissuades buyers away from the market.

The mortgage markets, however, are also running out of steam.  It can be inferred from the earnings call from Rocket Companies, Inc. (NYSE: RKT) that the mortgage market is experiencing a price war that, while temporary, is weighing on profits.  Mortgage companies are continually fighting to provide consumers with better rates, but this competition can only last for so long.

Whether you’re invested in the mortgage companies, real estate, or are simply an interested home buyer, here are some recommendations of markets to follow to find out if the steam does run out and a correction occurs in the housing market.

Mortgage Writers Rejoice

Mortgage companies like Rocket Companies, owner of Quicken Loans, North American Savings Bank (OTC: NASB), and Chase Bank (NYSE: JPM) saw massive profits during 2020 and early parts of 2021 as the demand for mortgages skyrocketed.  They expanded services, increased employee pay, and saw growth like they hadn’t seen since before the financial crisis in 2008. 

While banks generally learned their lesson the last time around, this time is different.  Back in 2008, the methods used by banks to get people to sign on the dotted lines were sometimes less than savory.  This led to a sharp rise in risky mortgages that eventually led to waves of defaults that the financial system wasn’t prepared to handle.

This time, the consumers have run at banks with their money and demanded mortgages.  On top of this, the mortgages being written are for individuals who meet lenders’ requirements.  According to this credit repair report, companies are more sophisticated now as well, and they are helping even more people get good rates and adding to the numbers flocking to mortgage companies.

However, the world is emerging from life during Covid, and the mortgage companies will be the ones to show the first signs of a cooling market.  It may have already started, as mentioned before during Rocket Companies, Inc.’s earnings call. 

The Luxuries of Home Improvement

Amazon will indeed rule the world if it can ever pose a threat to home improvement giants like Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW). 

While both companies certainly specialize in retail home improvement supply, the bulk of their business is from commercial sales in contractor supplies.  If you’ve ever tried to go to a Home Depot or Lowe’s on a Saturday morning, you’ve seen the lines of contractor trucks pulling through the bay to pick up cords of PVC, lumber, and other materials.  These items are not easy to ship. All the better for the continued legacy of both of these companies.

The consistent profits for Home Depot and Lowe’s over the last year have largely been fueled by both the new home market and the refinance market.  New homes depend on raw materials to build, and if the market for new homes begins to cool, Home Depot and Lowe’s will be the stocks to watch.  However, the new home sales market tends to lag behind existing home sales since new homes are often built by large development companies as inventory before they are sold to home buyers.

To a much larger degree, home improvement projects have seen massive growth due to homeowners refinancing their mortgages and using the savings to build upon home values.  This may represent the bulk of the correlation between home improvement stocks and the mortgage market.  While the home improvement market is expected to rise in the coming years, a fall in revenues could point to a cooling in refinance applications.

Summing Up

The mortgage market relies on bringing customers to the table to sign papers. 

However, there are only so many willing buyers, and most of them have been drawn out over the last year for a variety of reasons including the Work from Home movement, extra savings built up due to lockdowns, and historically low interest rates. 

While business has been good, the world emerging from the current crisis may signal a cooling in the housing market, though not to the extent of the 2008 financial crisis. Keeping track of mortgage writing and home improvement companies may provide an idea of where the sentiment lies and allow investors to prepare for changing markets in the near future.

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