Pa. consumer educator outlines common investment frauds, warns investors to verify offers

Katrina Boyer, investor education coordinator at the Pennsylvania Department of Banking and Securities, used a recorded webinar to outline common investment frauds and urge Pennsylvanians to verify offers and report suspected schemes.

Boyer said the session covered several recurring scams — affinity fraud, Ponzi schemes, free-lunch seminars, pump-and-dump schemes, promissory-note fraud and impersonator scams — and reviewed red flags investors should watch for and federal and state resources to check investment firms and professionals.

Boyer opened by noting "investment frauds are incredibly prolific once you've learned about what they are," and said fraudsters often exploit social ties, high-pressure sales tactics and spoofed contact information to trick people into sending money.

Why it matters: investment fraud can target community groups and vulnerable populations and produce large losses. Boyer cited examples ranging from the nationally publicized Bernie Madoff Ponzi scheme to local cases in Pennsylvania to illustrate how different scams operate and whom they target.

Most common schemes described

Affinity fraud: Boyer described how fraudsters embed themselves in churches, civic clubs or social groups to build trust and recruit…