Illinois Department of Financial & Professional Regulation Illinois Department of Financial & Professional Regulation
Bryan A. Schneider, Secretary  
Bruce Rauner, Governor
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Banks and Trust Companies - Tips

Investor Tips

Keep the following points in mind before you invest:

  • Obtain and review a written proposal or prospectus on the venture and the company, including financial statements.
  • Consult an accountant, attorney or other knowledgeable person whom you trust.
  • Contact the Illinois Secretary of State Securities Department to find out whether the company and the promoter have any history of problems with authorities.
  • Beware of schemes in which recruitment of new members is more important than the product being sold. Those in the scheme early may profit: those in late always lose.

Whenever in doubt, wait until you can consult all available resources.

  • Never send cash through the mail or give it to a messenger sent by the salesperson, and never give a credit card number over the phone.
  • Keep all correspondence and take notes of all conversations regarding an investment.
  • Do not be pressured into buying by "tomorrow will be too late" tactics. No legitimate broker will rush you into an investment. High pressure is a good indicator of fraudulent operations.
  • Beware of testimonials. Fraudulent companies sometimes hire people to claim that the firm's investments brought them wealth. Other con artists exploit the trust that members of churches and fraternal organizations have for one another: When one member of a group invests, the promoter uses that person as an unwitting accomplice by citing his or her investment to convince other group members to invest also
  • If in doubt, do not invest. It is better to be safe than sorry. Also, if you become suspicious, get out of the investment. Stop payment on your check or demand your money back.
  • If, after careful consideration, you decide to invest, keep your initial investment small. Pressure to put all your savings into a single investment is a sign of a scam. Most reputable stockbrokers believe that diversification is a wise safeguard. Also, never invest more than you can afford to lose.
  • In general, if the deal sounds "to good to be true" it probably is.
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