Consumer Protection

How to Protect Yourself: Investment Opportunities

Source: The Florida Attorney General's Office

While investments are a great way to create and grow wealth, some investment opportunities are not all they are made out to be.

Art Fraud:

You may receive a postcard or an email telling you that you have won a “free” original and valuable piece of art. After replying, you will get a call from a salesperson trying to sell you a piece of art. The telemarketer will try to convince you that you are being presented with a great investment opportunity. A common sales tactic is to claim the artist is close to death and that the death of an artist will increase the value of his or her work. The final selling point is the promise of a “certificate of authenticity,” which you will receive upon purchase. Often the certificate is worth nothing more than the paper it is printed on. Only an art expert can tell the difference between a valuable piece of art and a counterfeit. Before purchasing an expensive piece of art, have an independent art appraiser or a museum curator appraise the work. Obtain as much specific information about the piece as possible. If it is a print or painting, ask for the edition size, print medium, year of publication and the printer or publisher. Do not buy the piece of art until it has been appraised.


Crowd-funding platforms gives burgeoning products and businesses the opportunity to seek financial support from numerous individuals. Before backing a product or business venture, determine whether the platform you are using vets any crowd-funding campaigns or offers any protections should the campaign be found to be fraudulent. Be wary of campaigns that offer few details about the project or product they are offering. Credible campaigns generally offer detailed information about the project, any anticipated production deadlines and updates as they occur.

Investing in Gemstones and Rare Coins:

Slick telemarketers try to convince you that the dollar is weak and that gemstones are a solid investment that will quickly increase in value. Do not be fooled; few consumers profit from investing in gemstones. Before investing in gemstones, talk to a respected jeweler in your area. Ensure that you understand gemstone quality and grading, realistic market values and historic gemstone prices. Independently hire a jeweler to perform an appraisal of any gemstones you intend to purchase. Determine what the liquidation value is for gemstones you intend to purchase; this price may be much less than you anticipated. Additionally, know that it may take time to find a buyer for the gemstones.

Investing in Precious Metals:

Telemarketers call potential victims using high-pressure sales tactics to persuade them to invest in precious metals such as gold, silver and platinum. Victims are sold a quantity of unprocessed dirt from a mine “guaranteed” to contain enough precious metal to make a profit on the investment. In reality, the mine contains little, if any, precious metal and the investment is likely worthless. Before investing in a precious metal mine, ask yourself, “If this is such a great investment, why isn’t the company getting its own financing and reaping the profits themselves?” Because the market for gold and other precious metals is unstable, investing in these commodities is speculative and risky at best.

Investing in Rare Coins:

Telemarketers may call attempting to convince you that rare coins are a solid investment. Do not be fooled by these claims. Few consumers ever profit from investing in rare coins simply because they do not have enough information to make the best investment decisions. Before investing in rare coins, talk to a respected coin dealer. Contact the American Numismatic Association (ANA) at to locate an ANA certified coin dealer. Independently hire a coin dealer to perform an appraisal of any rare coins you intend to purchase. Determine what the liquidation value is for coins you intend to purchase; this price may be much less than you anticipated. Additionally, know that it may take time to find a buyer for the coins.

Multilevel Marketing Plans:

Multilevel marketing plans require you to sell a product and enlist several other people to sell the same product. They promise a profit on the products you sell and a “cut” on all products sold by the people you enlist. Before enlisting in a multilevel marketing plan, ask for references. Get the names and phone numbers of people in your area that have joined the plan. Ask them how long they have participated in the plan, what their experience has been and their average monthly sales and commissions. Determine the saturation levels in your area of distribution. Legitimate companies do not allow too many distributors in a single area. If you do decide to become part of a multilevel marketing plan, start with a small investment and build gradually. Beware of companies which pressure you to invest large amounts of money up front.

Ponzi Schemes:

A Ponzi scheme, also known as a pyramid scheme, is a scheme in which investors are usually promised an unrealistic rate of return in exchange for an investment. It is also usually represented that the funds will be invested in such a manner that no one else knows about or has the same competence as the principals in the scheme. The funds are not invested as represented and initial investors are paid interest and principal from new investors and not from any actual investment activity. The scheme collapses when new investments no longer can sustain the interest and principal payments made to initial investors. At that point there is little left for investors to recover. The fact that investors receive interest and principal payments does not mean that there is not a Ponzi scheme; it means only that those investors were paid by funds collected from subsequent investors rather than investment proceeds. Ponzi schemes can continue for many years undetected before collapse as long as new investors can be recruited.

File a complaint.

If you have been the victim of an investment scheme, file a complaint with the Attorney General’s Office online at or by phone toll-free at 1-866-9-NO-SCAM. You should also report the scam to Florida's Office of Financial Regulation online at or by phone toll-free at 1-800-848-3792.

You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State's consumer complaint clearinghouse, at