The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation has joined forces with the Better Business Bureau (BBB) to launch a new website, BBB Smart Investing, which is intended to help investors avoid unlicensed brokers and fraudulent investment schemes.
The website, located at www.bbb.org/smartinvesting, combines the consumer outreach of BBB with the extensive knowledge of FINRA.
Gerri Walsh, FINRA Foundation President, said that the campaign would help investors protect themselves from fraud. The website offers resources to help investors detect investment scams.
Investment fraud causes serious harm in North America. Consumers in the United States and Canada were defrauded of over $1.5 billion by scammers in 2011, according to the Federal Trade Commission (FTC) and the Canadian Anti-Fraud Centre. FINRA conducted a telephone survey that found that many investors show overconfidence about their ability to detect fraud. This was especially true of investors in the baby-boomer generation, who are often the target of scams. The telephone survey found that 92 percent of respondents said they were “somewhat” or “very” confident about their financial management skills, but only 44 percent were able to pass a test of basic financial knowledge. The BBB Smart Investing website hopes to provide people with that basic financial literacy.
Carrie Hurt of the Council of Better Business Bureaus said that the FINRA Foundation’s message of “Ask & Check” is what consumers should consider before making decisions about investments. According to Hurt, scams have become more common as retirees attempt to manage their retirement funds on their own.