by | Mar 4, 2015

It’s long been known that financial scammers of all sorts have seen Physicians and Dentists as prime targets for a variety of illegitimate investment products, identity theft scam-alertscams, and dodgy “special deals” that have cost medical and dental professionals tens of millions of dollars over the past several years.

The financial hazards targeting MDs and DDSs range from perfectly legal limited partnerships and high cost variable annuities to illegal phony tax saving scams and bogus investment deals.  

It isn’t hard to guess why MDs and DDSs are targets of financial fraud; overly-busy schedules, mass amounts of conflicting information, unreliable but well-meaning advice given by friends and colleagues along with legions of eager financial salespeople who often make a lot of questionable promises.  

But Physicians and Dentists can protect themselves from fraud of all sorts, if they follow a few simple “Rules of Engagement”. Follow these simple rules and you can avoid being taken “for the proverbial ride”. 

1 Ask for Credentials: When approached by anyone engaging in anything financial; ask to see evidence of their license or other legal credentials. Investment dealers must be registered with FINRA and can be looked up on the site. CPFs and CPAs and be checked through their board certification bodies. If the person pitching the investment or deal is not registered with FINRA or another regulatory agency, avoid that person’s and their pitch. 

2 Where is the Money Going? Is the investment or deal you’re considering sending your money into going to an account at a legitimate bank, brokerage or legal escrow account? Statements that do not come from recognizable financial institutions that can be contacted separately from the person who is pitching you the deal can often be totally bogus. 

3 Does it Sound Too Good to be True? Promised returns that exceed normal reported averages for income, capital gains, tax savings or other benefits may indeed be too good to be true. Beware of “Foreign or Overseas Bank” deals, exotic trading strategies and especially private deals that are usually available only to “the Super-Rich”. There is no easy-money fairy that favors only you and a few of your friends.  

4 Beware the Tax Scam Man: Taxes are a heavy burden for most physicians and dentists who fall into that particular IRS income bracket where you earn only an upper middle class income but are taxed as if you are wealthy. This tax vulnerability has exposed many MDs and DDSs to phony tax fix and tax reduction schemes, which can cost a fortune up front and can result at some later date in a letter from the IRS and state tax authorities demanding a big tax payment. If you owe the tax, pay it. No fast talking tax operator can make your taxes disappear; ask any reputable CPA. 

5 Learn to Say the Magic Word: NO: It’s easy to say no to something that sounds legit and offers what you already know is available, though the conventional asset is usually your best choice. But when offered something that sounds really, really great, (like an Indie movie deal or an exotic real estate transaction) but cannot be corroborated through the four rules above, learn to say the magic word: NO. Some persistent operators may not wish to take “No” for an answer. Force them to take NO for your answer. Make reference to the FBI or other Federal law enforcement if necessary. You never have to be nice to scammers.

 So what constitutes an investment that complies with all of the proper rules of financial engagement?

In our next installment, we’ll look at a legitimate investment program known as Dividend Power, which owns blue chip stocks, pays dividends and how it complies with all of the Rules of Engagement. 



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