Whether it is through the internet or in the real world, investment scams are a fact of life. Here is a list of the top ten investment scams compiled by the California Department of Corporations:

• Promissory notes. The illegal and fraudulent sale of promissory notes and unlicensed broker-dealer activity by the sales agents marketing them. Some legitimate brokers are selling these promissory notes unaware or misunderstanding what they are selling.

• Internet fraud. Through the use of internet, scamsters are plying their trade by making illegal and fraudulent investment offerings, engaging in market manipulation, conducting insider trading and acting as unlicensed broker-dealers.

• Telemarketing fraud. Boiler room operations are not new. High pressured telephone sale tactics are being used to part innocent investors from their money by encouraging investors to invest into worthless investments.

• Investment seminars and financial planner activity. Many investment seminars and financial planner activity are carried on without the required licenses. The organizers of these seminars fail to disclose conflicts of interest and hidden fees and commissions. Many investment seminars are not sincerely aimed at aiding investors on how to invest but are trying to sell certain financial products in which the organizer has an interest.

• Affinity group fraud. Affinity group fraud is the fraud against religious, ethnic and professional groups by members of these groups or persons claiming to provide assistance to these groups. Members of these groups are lulled into a false sense of security believing they can trust a group member who is merely a wolf in sheep’s clothing trying to encourage the purchase of a worthless investment.

• Abusive sales practices by licensed broker-dealers and agents. These practices include sales of securities to unsuitable investors, failure to disclose critical information, fraudulent offerings of securities and market manipulation of low-priced microcap offerings.

• Viatical investment scams. According to the Department of California Corporations, "Viatical investment companies solicit investors to buy interests in the death benefits provided for in life insurance policies of terminally ill patients, including AIDS and cancer patients. The insured receives a discounted percentage of the death benefits in cash to allegedly improve the quality of their lives in the final days. Investors get their share of the death benefit when the insured dies, less a brokerage fee for the viatical investment broker." These investments are extremely speculative because of the uncertainty involved in determining when some is going to die.

• High tech products and services. There has been an increase in the number of illegal offerings of high tech investments. These offerings promise high profits with no risk. These investments include investing in 900 number investments, Internet service providers and high tech virtual reality shopping malls.

• Entertainment. As with high tech products, some scamsters are promoting investments in movie deals and other entertainment products with promises of guaranteed profits without disclosing the risk.

• Ponzi/pyramid schemes/bunco. Ponzi schemes occur where tremendous rates of return are paid to initial investors out of funds from later investors, who end up losing all of their money when they wish a return of their investments. A pyramid scheme involves the collection of money from individuals at the bottom (new investors) to pay the initial investors at the top. The object of the scheme is to recruit new members rather than on selling the product or service. Finally there is the prime bank investments scheme. Here the promoter tells the innocent investor that there are certain prime international banks that pay exorbitant interest rates. These investments according to the promoter are quite secret and only available to select investors. The investor lends his or her money only to find out that there are no such banks and that he or she lost all of his or her money.