Consumer fraud summit reports $20 billion lost by victims in one year; prevention tips offered

BEACHWOOD, Ohio - Two-hundred residents packed the Montefiore Senior Living Center in Beachwood to get the latest advice from federal and state law enforcement leaders on financial fraud protection.

The latest FBI report documents an unprecedented increase in investment fraud schemes, resulting in 500 arrests and convictions, with victims losing more than 20 billion across the country in 2011.

U.S. Attorney Steve Dettelbach told NewsChannel5 there are some common "red flags" consumers must be aware of that will keep them out of trouble.

"If somebody asks you for a big payment up-front for a service they haven't rendered, or if you aren't sure about the person's identity, you ought to be careful," said Dettelbach. "Beware of people who are promising you rates of return at 20 to 25%, and are guaranteeing you results."

Representatives from the Legal Aid Society, the Better Business Bureau and John Miller Steiger from the Federal Trade Commissioner, were also on hand at the fraud summit.

Steiger warned consumers about two of the most popular scams that are ongoing -- those involving investments into rare coins and work-at-home business opportunities.

"People are looking for a ways to earn a little extra income," warned Steiger. "These companies are coming across making offers that sound appealing, that seem to have the numbers behind them, but these companies are actually lying to the consumers."

Residents were also warned about "affinity fraud,"  which includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities.

"A former police officer, turned investment advisor, suckered his former colleges into losing their retirement," explained Dettelbach. "There was even a case where an Amish man went to the Amish community and robbed them of $15 million."

The summit in Beachwood was one of six held across the country, designed to warn consumers about the latest consumer fraud schemes.

The Financial Fraud Enforcement Task Force has set up a website that contains a wealth of information on how consumers can best protect themselves and their money.