DON'T FALL FOR BOILER ROOM PRESSURE

Financial fraud costs consumers an estimated $660 billion annually. In an effort to combat economic crime, Florida's Governor and Cabinet have proclaimed Feb. 5-11 as Fight Fraud in Florida. As part of this initiative, the Department of Banking and Finance (DBF) is alerting citizens about some of the latest scams being perpetrated in our state. Comptroller Bob Milligan, who directs DBF, wants all citizens to be aware of this crime and armed with knowledge to avoid being a victim of financial fraud.

Every day, unwary investors find themselves taken in by promises of hot stocks and quick riches from slick-talking and persistent scam artists who make an estimated 40,000 calls each day from "boiler-room" telephone banks. The average victim loses around $3,000, some lose their life savings, and statistics show that everyone is vulnerable – not just the stereotypical elderly investor.

But there are steps you can take to protect yourself. The following is a checklist to help discern legitimate offers from boiler-room scams:

Ask where the caller got your name.  If he says you were recommended, ask by whom. Be especially wary if you've made a bad investment before. Boiler rooms often circulate lists of "easy marks."

Ask what the risks are. There is no sure thing – all investments involve risks.  If anyone tells you differently, hang up.

Ask about commissions and management fees.  Fees vary depending on investment, and it can pay to shop around.  Be wary of investments that have no fees.

Ask the caller to send you a prospectus.  Legitimate brokers will be happy to send you one. And they will be willing to wait until you have read it.  Don't buy the story that the prospectus is at the printer.

Ask for a risk disclosure document and an investment proposal.  Risk disclosure is required by law, and most investments will also have a proposal that explains the deal in layman's terms.

Ask to meet with the broker or a representative of the company.  Most boiler-room operators will not want to meet with you. Better yet, ask if they could meet with your accountant or lawyer – people who are better trained to spot a scam.

Ask for references from the seller's bank and lawyers.  Do not settle for references from other investors.

Never respond to pressure.  If the caller tells you there is no time, you must act now  -- hang up.

Ask who regulates the seller's industry.  Investments are regulated by a variety of agencies at the state and federal levels, and the caller should be happy to tell you who regulates their industry and where to contact them.

Check out the firm and the brokers offering the investments.  The Department of Banking and Finance regulates the securities industry in the state. Call the DBF hotline at 1-800-848-3792 to find out if the company, broker and the investment are legitimately registered, and if they have a complaint history.  In addition to the hotline, DBF and the Attorney General's Office have also created a new web site to help educate the public about financial fraud. The URL is:   www.fightfraud.org.