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Ten tips to protect yourself from unscrupulous providers

FINMA’s 10 tips on how investors can protect themselves from unscrupulous providers. What they should do if they have fallen victim to illegal or fraudulent activity. What they can do if an authorised provider doesn’t meet their expectations. If in doubt, investors can simply contact FINSOM.

By following the ten simple rules of the Swiss Financial Market Supervisory Authority (FINMA), investors can significantly reduce the chance that they will become victims of illegal or fraudulent providers :

  1. Take time to consider your investment decisions. Don’t allow yourself to be put under pressure. Diversify your investments; don’t put all your eggs in one basket.
  2. Before you make an investment, do your own research into providers and products, and don’t be taken in by glossy brochures or slick telephone marketing. Use Google or other search engines to research providers and products.
  3. Check whether the providers are authorised by FINMA. Remember that not every company which is supervised by FINMA is subject to intensive ongoing (i.e. prudential) supervision.
  4. Check whether the provider’s name appears in the FINMA warning list or the IOSCO Investor Alerts Portal. If so, FINMA advises that you exercise the utmost caution and restraint.
  5. You can check the entry for Swiss providers in the Commercial Register at Frequent changes of company name, address or authorised signatories should make you suspicious.
  6. In the case of providers or offers from outside Switzerland, you should always consider who you could turn to if problems arise. How (against whom, where and at what cost) could you assert a claim?
  7. You should also make use of relevant internet forums and consumer sites. Posts from worried investors or people who have already suffered losses are a warning sign.
  8. Compare the products, returns and commissions with those of other providers. If they are significantly better than those of companies authorised by FINMA, you should exercise caution.
  9. Innovative technologies and products (e.g. virtual currencies) can be attractive, but they can also be risky. In reality, major breakthroughs are few and far between. Find out as much as you can, and only invest when you are sure you understand what is being offered.
  10. Always remember the fundamental rule of investing, that high returns always mean high risks. The risk of loss is often much more real than the chance of turning a profit.

If you realise that you are the victim of a fraudulent provider, FINSOM recommends to immediately report the transactions to your bank and the bank you sent funds to, file a complaint with your local police authority and notify FINMA. If you are dealing with a fraudulent website, you can also report it to the relevant authority in the jurisdiction responsible for the domain (.com, .ch, etc) and to the domain name registry. 

If you realise that you are dealing with a service provider that does not have the necessary authorisation to operate in the Swiss financial centre, FINSOM recommends to notify FINMA.  

If a provider authorised to operate in the Swiss financial centre does not meet your expectations and you are unable to find a satisfactory solution together, you may contact the Ombudsman Office (or “Mediation Body”) to which the provider is affiliated. 

If in doubt, simply contact FINSOM.