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Dubious finan­cial ser­vice providers

Brazen finan­cial ser­vice providers tempt cus­tomers looking to invest with promises of high yields. But such seem­ingly large profits come with high risks. And some­times even involve illegal schemes.

How to pro­tect your­self against dubious finan­cial ser­vice providers:

(inspired by the “Ten tips for pro­tecting your­self against unscrupu­lous providers” of FINMA)

  • Take your time to make any deci­sions on where and how to invest your money. Don’t let any­body pres­surise you.
  • Before you invest any funds, do some research on your own about provider and prod­ucts, e. g. using Google. You can also use rel­e­vant Internet forums and con­sumer web­sites to do so.
  • Check whether the provider holds a FINMA autho­ri­sa­tion or is listed on the FINMA black­list or the IOSCO Investor Alerts Portal. You should also check the cer­tifi­cate of reg­is­tra­tion of Swiss providers under zefix.ch.
  • For providers or offers from abroad, you should always con­sider who you can turn to in case of any prob­lems.
  • Com­pare prod­ucts, yields and com­mis­sions with other providers. In case they are con­sid­er­ably better than those offered by insti­tutes which have been autho­rised (by FINMA), you should act with cau­tion.
  • Inno­v­a­tive tech­nolo­gies and prod­ucts (for instance vir­tual cur­ren­cies) might look like exciting new oppor­tu­ni­ties, but they also har­bour risks.
  • You should always remember the one basic rule for investing: High yields are always linked to high risks.

It is during any low-interest period in par­tic­ular that investors are sorely tempted to entrust those providers with their money which offer high yields. But the higher the yield, the higher gen­er­ally the risk. Fre­quently, par­tic­u­larly attrac­tive offers fre­quently have rather dubious or even illegal providers hiding behind them. The higher the profits promised then, the more thor­oughly investors should check providers and their offers before deciding on any invest­ments.

The FINMA video “Pro­tec­tion against invest­ment fraud” also pro­vides some prac­tical tips how you can pro­tect your­self.

Report dubious offers

If you dis­cover any dubious offers, you can report them to FINMA via their report form. Such tips enable FINMA to uncover any finan­cial ser­vice providers who act ille­gally and to take them out of busi­ness.

Investors most fre­quently lose money if they entrust their funds to a com­pany oper­ating ille­gally. Illegal finan­cial ser­vice providers are very inven­tive and keep devel­oping new busi­ness models to rip off investors and steal their money.

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