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FINRA Issues Investment Alert for Bait-and-Switch Marketing Ploy Involving High-Yield CD Offers

FINRA issued an investment alert regarding advertisements promoting high yield CDs that offer rates significantly higher than other bank products, warning investors that such an ad may instead be a marketing ploy and sales pitch for a potentially risky investment.

According to FINRA, the promotional ploy may require investors to show up at an office or branch and interact with a salesperson or other representative, who will try to sell an alternative product different from a CD. The promotion may also require a notable minimum investment, such as $25,000.

In this bait-and-switch scheme, the alternative, non-CD product being pitched—often an annuity—is typically riskier and subject to significant fees and commissions that otherwise wouldn't have plagued an actual FDIC-insured CD product.

FINRA also notes that even after declining the annuity product and opting for a "high yield CD," the "high yield" be comprised of a "bonus" plus the CD's actual average percentage yield (APY). If the CD itself advertises a certain yield, for instance, investors may be wise to confirm that the entirety—or significant majority—of that the published percentage is indeed the CD's actual APY.

If you have invested with a broker, financial adviser or firm whose high-yield CD advertisement turned into a bait-and-switch scheme that has proven harmful to your investments or interests through the accumulation of excessive or unnecessary fees or commissions, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

News Release: FINRA Warns High-Yield CD Offers Can Be Bait for High-Commission Investments (FINRA)

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