BY: KENRIC WARD | POSTED: FEBRUARY 22, 2011 3:55 AM

Calling Florida the epicenter of an auto insurance “fraud epidemic,” industry groups want the Legislature to crack down on scam artists who are driving up motorists’ premiums.

“Floridians need to know that our state, unfortunately, continues to have the highest number of questionable, or ‘staged,’ auto accidents of any other state in the country,” said William Stander, assistant vice president for Property Casualty Insurance Association.

Stander’s group was joined by the Florida Chamber of Commerce and the Associated Industries of Florida in calling for reform — but not abolition — of the state’s no-fault (PIP) insurance program.

“Florida’s business community can no longer afford to stand by and expect PIP fraud to go away. We must do something now,” said Teye Reeves, the Chamber’s director of business climate and quality-of-life policy.

Noting that Miami, Tampa, Orlando and Hialeah rank among the U.S. cities with the highest rates of questionable claims, Stander said Florida motorists pay the second-highest auto liability insurance premiums in the nation.

The 2008 average annual liability premium is 6 — 56 percent higher than the national mean of 1, he said.

The Insurance Information Institute estimates that, if left unchecked, the increase in premiums related to insurance fraud could reach 6 million for insured Florida drivers this year.

“PIP fraud is out of control in Florida,” said Jose Gonzalez, vice president of governmental affairs for Associated Industries of Florida. Gonzalez said AIF supports the efforts of a new industry-launched website, InsuranceFraudUncovered.com, to highlight PIP fraud in the state.

The industry consortium said it will propose a series of legislative remedies during the 2011 session, including:

EXAMINATIONS UNDER OATH: Stander said court decisions have “created confusion” regarding an insurer’s ability to investigate claims by using a procedure called an examination under oath. These are routinely used to determine if fraud exists by interviewing the policyholder or provider regarding the alleged benefits received, under penalty of perjury for lying. The insurance industry recommends specifically authorizing the use of EUOs by insurers to investigate fraud.

INDEPENDENT MEDICAL EXAMS: In the course of investigating a claim, an insurer can conduct an independent medical examination on an insured to determine the extent of injuries and what sort of treatment is reasonable. If an insured is participating in a fraud ring, or even if an honest insured is just following directions from a clinic or PIP lawyer who is part of a ring, the insured often misses or never goes to these appointments, in order to keep the crime a secret.

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Stander said courts have allowed motorists’ lawyers “to keep making excuses for never showing up to an IME.” The insurance industry recommends specifically stating that a refusal to submit to an IME is a rebuttable presumption that the failure was unreasonable.

ARBITRATION: When disputes exist, they can often be resolved faster and more efficiently by using arbitration, which also saves the taxpayer money by reducing the caseload on the court system, Stander said. The industry recommends allowing an insurer to offer a policy that includes arbitration as an alternative dispute resolution mechanism available to both the insured and the insurer, while preserving everyone’s right to access the court system if necessary.

PIP LAWYER FEES: Florida PIP law requires an insurer to pay both its lawyers’ and the insured’s lawyers’ fees if the insurer loses in court, even if the insurer thinks the claim is a scam.

“Sometimes the insured’s lawyers’ fees total more than the original ,000 in PIP coverage. This causes an insurer to think twice about challenging suspicious claims or medical treatments,” Stander said.

Likewise, he added, “lawyers have an incentive to file as many lawsuits as possible for any reason, all the while driving up insurance costs for everyone else.”
Since a similar change to the workers’ compensation laws in 2003 resulted in substantial savings for policyholders, the industry recommends capping lawyers’ fees in PIP litigation to a percentage of benefits obtained.

PIP LAWYER FEE MULTIPLIER: In addition to their regular hourly fees, PIP lawyers can also obtain something called a “contingency risk multiplier.” Originally developed to encourage attorneys to take on difficult civil rights cases, the multiplier now regularly shows up in PIP cases, and multiplies up to 2 1/2 times the amount of money a PIP lawyer can make in litigation.

“These inappropriate multipliers dramatically increase the PIP lawyer’s incentive to sue in a no-fault system that is supposed to be free of litigation,” Stander said. The industry recommends prohibiting the award of contingency risk multipliers in calculating PIP lawyers’ fees.

EXPANDED INVESTIGATION AND PROSECUTION: Among the many reforms that could help solve this problem, the industry seeks crash reports that include the names and addresses of all passengers, better licensure and inspections of PIP clinics, and more authority and funding for Chief Financial Officer Jeff Atwater and the Department of Financial Services.
Critics of the industry proposals question the scope of the problem, alleging that little specific data exist on PIP claims because insurance companies closely guard such information. The Florida Department of

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Home Page > Finance > Day Trading Scams – Detecting Frauds

Day Trading Scams – Detecting Frauds

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Posted: Feb 17, 2011 |

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A currency trading scam is any scheme used by particular folks to trick individual traders by convincing them of big or guaranteed profits by trading in the forex market. The forex market has for quite a while been plagued by scammers looking to pounce on the un-educated so they may defraud these individuals of their funds. Naive wannabe fx investors are often swindled out of thousands of dollars by fx trading frauds.

A common situation of a foreign currency trading scam happens any time investors are promised gains of 1000′s of dollars in short durations of time such as weeks or months if the investors can make a significant deposit/investment. The bigger the deposit, the larger the gains they guarantee. In most of these rip-off cases, the investor’s money is never actually traded in the forex market however instead diverted to an unidentified account for the personal advantage of the scam artists. Other cases are the reporting of artificial trades. It appears as if the rip-off artist is investing or you yourself are trading your personal money however in reality, absolutely no orders are being sent to the market. So what may possibly show up as a loss, in reality is not and is going to the bank account of the scammer.

Currency scams may be discovered for their common characteristics. One of the obvious indicators of such scams includes promises of big profits. Most forex scams attempt to entice unsuspecting victims by simply promising large returns for low risk opportunities in specific currencies. Masterminds of forex trading cons additionally employ extremely persuading or high pressure workshops and tactics to persuade investors to right away send money through money transfers or through overnight shipping organizations.

These cons may occur your way through advertisements in papers and magazines or also on national TV such as CNBC. Simply because you see someone publicize on a popular medium does not ensure their authenticity. Such ads assure high rewards for apparently low risk investments in the forex market. A number of scams may also make use of unsolicited phone calls in order to get in touch with possible investors and use their high pressure strategies to persuade individuals to take part and invest in their con.

One way to avoid becoming a victim of such currency trading scams is by becoming conscious of these signs. Another way is via due diligence. Prior to investing on any apparently desirable offer that you suspect to be a con, attempt to investigate its background. Search the internet for just about any negative feed-back or press. If there is any, run away. Don’t attempt to convince yourself that all is okay for the sake of potential profit. A lot of people buy into the guarantees of wealth and have a tendency to disregard all the warning signs. Don’t let that take place. Before you give any amount of money to a forex trading company offering highly profitable guarantees, check whether the company involved is registered with the CFTC or the United States Commodity Futures Trading Commission or the NFA or the National Futures Association.

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Robot Scams Vs Accurate and Profitable Systems

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Posted: Jan 22, 2009 |

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The landscape of Forex is littered with a multitude of Forex Robots that have bitten the proverbial dust. These are the automated systems that claimed great profits could be gleaned from the Forex market for the hapless buyer who happened to buy one.

The only thing these Forex Scams delivered were empty promises that emptied the pockets of their disillusioned victims.

So are there any Forex Robots that can actually make a profit on the Forex market?

There are a few out there, and here’s what to look for if you’re in the market for a solid trading system.

1. Does the track record of the Forex Robot look too good to be true?

Most Forex Robots are only back-tested for a very short time period and then make bold claims that they can be profitable in live trading.

A Forex Robot needs a decent time frame to be back tested in. There is one robot that has been back-tested for the last nine years which means it has been tested very robustly and in that time made approximately 9476 trades.

Always find out how long a Forex robot has been back-tested. The less time back-tested the more likely it won’t fare well in live trades.

2. What Is The Live Trade Record? Of course back testing isn’t enough to prove a Forex Robot’s worth. The proof of course is in the way it functions in live trades. What is its live trade record?

A Forex robot that is going to be worth using should turn 30 to 100% annual profits. Anything less should be avoided.

3. Support and Ease of Use: Look for good live support from the vendor. Also make sure that the Forex Robot is technically easy to use and monitor.

4. Always dry run the system to make sure that you know what you’re doing before you begin live trading with real money.

5. Last but not least, make sure that your Forex Robot comes with at least a 60 day guarantee; so that you can have enough time to test drive the system. You want to make sure it will work profitably for you without any risk.

The best Forex Robots will give you excellent long term profits when used with discipline and with the knowledge that there will be some short term losses along the way

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Online Forex Trading – 4 Tips to Avoid Scams

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Posted: Jan 19, 2008 | Views: 172 |

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Forex trading scams are plastered all over the internet, and scam artists are getting better at what they do. In this article, I’ll give you 4 tips to help you better identify and avoid potential Forex scam websites.

Tip #1: Don’t buy from websites that tell you Forex trading is easy

Ask any profitable trader, and he’ll tell you that it took a lot of hard work and patience before he started making any money in Forex. It is in our human nature to want things quick, convenient and easy, but unfortunately learning to trade Forex profitably is anything but that.

New traders are lured by the scammer’s promises of “quick” and “easy” profits in Forex trading; but as much as I would love to believe them, the only people who are going to make quick and easy profits are the scammers themselves… at YOUR expense!

Tip #2: Don’t buy from websites that claim to have a “secret” trading method

This is another myth about Forex trading that many new traders want to believe. Similar to Tip #1, many traders like to believe that there is a “secret” or “holy grail” trading system that can make profitable Forex trading as easy as pie. All you’ll need to do is to purchase this ultra-secret, “underground” trading method for 7 and you’ll be set for life! …yeah right.

Most of the time, if something sounds too good to be true, it probably is. Don’t fall prey to these lame offers… they’re there to cheat the ignorant and the dreamers. Good Forex traders aren’t dreamers, they trade on sound logic and calculated risk.

Tip #3 Avoid trading systems with over 90% accuracy

Again, such incredible claims are there to try and convince you that Forex trading can be easy. There are many things I can say about this topic, but just let me cut things short for you: even the big investment banks with their advanced technology, lower spreads, larger capital and highly-trained traders don’t enjoy such high percentages of success. It’s very, very unlikely for some “underground trader” to be able to beat their winning percentages.

Tip #4: Ask for an ACTUAL trading track record

Many scam Forex websites like to post up hypothetical or back-tested trading results. Don’t be fooled by them. You see, anyone can develop trading systems that work very well on past market prices… after all, who can’t make money if they know what’s going to happen next?

Before you purchase any trading system, make sure you’ve seen the track record of the system’s actual gains and losses.

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Forex Trading – Avoid Scams In The Market

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Home Page > Finance > Day Trading > Forex Trading – Avoid Scams In The Market

Forex Trading – Avoid Scams In The Market

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Posted: Jun 05, 2010 |Comments: 0
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The foreign exchange market is also known as FX or it is also found to be referred to as the FOREX.

All three of these have the same meaning, which is the trade of trading between different companies, banks, businesses, and governments that are located in different countries. The financial market is one that is always changing leaving transactions required to be completed through brokers, and banks.

Natalia Osorio Editor of the “Best Forex Trading” website — http://www.BestForexTradingUsa.com — pointed out;

“…Many scams have been emerging in the FOREX business, as foreign companies and people are setting up online to take advantage of people who don’t realize that foreign trade must take place through a broker or a company with direct participation involved in foreign exchanges.

Cash, stocks, and currency is traded through the foreign exchange markets. The FOREX market will be present and exist when one currency is traded for another. Think about a trip you may take to a foreign country. Where are you going to be able to ‘trade your money’ for the value of the money that is in that other country? This is FOREX trading basis, and it is not available in all banks, and it is not available in all financial centers. FOREX is a specialized trading circumstance…”

Small business and individuals often times looking to make big money, are the victims of scams when it comes to learning about FOREX and the foreign trade markets. As FOREX is seen as how to make a quick buck or two, people don’t question their participation in such an event, but if you are not investing money through a broker in the FOREX market, you could easily end up losing everything that you have invested in the transaction.

Scams to be wary of:
A FOREX scam is one that involves trading but will turn out to be a fraud; you have no chance of getting your money back once you have invested it. If you were to invest money with a company stating they are involved in FOREX trading you want read closely to learn if they are permitted to do business in your country. Many companies are not permitted in the FOREX market, as they have defrauded investors before.

In the last five years, with the help of the Internet, FOREX trading and the awareness of FOREX trading has become all the rage. Banks are the number one source for FOREX trading to take place, where a trained and licensed broker is going to complete transactions and requirements you set forth. Commissions are paid on the transaction and this is the usual.

“…Another type of scam that is prevalent in the FOREX markets is software that will aid you in making trades, in learning about the foreign markets and in practicing so you can prepare yourself for following and making trades. You want to be able to rely on a program or software that is really going to make a difference. Consult with your financial broker or your bank to learn more about FOREX trading, the FX markets and how you can avoid being the victim while investing in these markets…” N. Osorio added.

Further Information About The Best Forex Trading Softwares And Resources  By Visiting; http://www.BestForexTradingUsa.com

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Home Page > Finance > Currency Trading > How to Spot Forex Education and Training Scams

How to Spot Forex Education and Training Scams

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Posted: Jan 20, 2011 |Comments: 0
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Atten-hut! Fellow traders, you’re very fortunate that you’ve landed on this legitimate and helpful website. In this article, we will attempt to discover how to spot Forex scams and protect ourselves from their devious actions. We will discuss some of the issues, and then identify their common motives and traps.

First of all, it’s good to know that you’ve made up your mind to get into forex market, the world’s largest financial market, and a place that provides abundant opportunities to make money. Forex is a marketplace where buyers and seller of worldwide currencies meet at the same time, although not at the same place. They trade in the market everyday from Monday to Friday, 24 hours a day.

Without a doubt, the market can be very lucrative, promising and engaging. With such easily available money making opportunities in Forex, it surely attracts more people to jump into the Forex Battleground. Many people enter the market with big dreams of being a winner in the market. Unfortunately, most of them forget that risk always come along with every opportunity.

Because of their burning desire to succeed, they neglect the importance of being a well-informed investor with an arsenal of intelligent trading weapons. They trade money they can’t afford to lose, get too excited with small and occasional profit, and too emotional when suffering a loss. At times, they even damage themselves greatly by ignoring a huge loss until it grows to the point that it wipes out their entire account.

In the eye of some unscrupulous people, the scam artists, the uneducated investor and novice trader are big money. Hence Forex scam artists have flooded the market, offering various bombastic products and services, ranging from “instuctional” Ebooks, so-called trading robots, trading signals, free trainings, trading awards and so on.

Their Ebooks don’t give you precious information on market analysis and trading. It only contains general info which you can get for free on the internet. Their trading robots or automated trading programs are selling at average 0 each, with huge promise from the scammy vendors: “Win 95% of all trades – Generate 0,000 per month” Do they think it’s so easy to be a winner in forex market? If their robots can generate huge amount of money consistently why they sell the robots with relatively cheap price?

Some of Forex scams also offer cheap trading signal, claiming their signals are the best. The bad side is they never give us the track record of their signals accuracy. After a certain amount of time, you’ll know why they don’t publish their signals – it’s because the accuracy is so low and if you follow the signals, you will be unprofitable. Some scammy online brokers also lurk in the internet market enticing wanna-be and inexperienced investors with low spread, free commission trading and free Forex training. Then soon after they have sufficient number of clients, they disappear without any warning, taking all the proceeds and deposits with them.

So wake up, friends! Be ready for those Forex scam artists’ attack! You have to protect your money from these thieves. You need to know how to spot Forex scams. Here is the list of some things you should remember when you come across any suspicious forex website:

When something sounds too good to be true, the odd are that it’s not true. Traders play the odds and probabilities. Don’t start off your trading career with a bad “trade”.

Don’t fall into the over-hyped presentations of affiliate sales pages and “user’s” testimonials. These people are willing to lie to their own mothers to make a sale.

Make sure you only buy what you need. Trading does not have to be complicated, and continuing to look for the “next big thing” will always get you into trouble. Stop searching and focus on a good, quality education. It will help you to control yourself and avoid the predatory scam artists.

Use your common sense, don’t expect a quality product with cheap price, although there are exceptions to this rule. On the other hand, you have to be sure you’ll get your money’s worth.

When there is no clear contact person and business address, please place more caution on them.

Go to reliable trader forums, review websites and blogs if you are not sure on a product or service.

And even though you’re here and now know how to spot forex scams and avoid them, you certainly still need to acquire more knowledge and information to be successful as a Forex trader. We suggest you

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Home Page > Finance > Currency Trading > Forex Trading Products, Are They All Scams?

Forex Trading Products, Are They All Scams?

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Posted: Jan 10, 2011 |Comments: 0
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If you look on the Internet for a Forex product, system or service, you will undoubtedly find people complaining about scams. As a matter of fact, there is so much complaining going on you have to wonder if everything Forex related online is a scam. Contrary to what you might have been told, becoming a successful Forex trader is more involved than download a Forex system and studying it over the weekend. In my experience, it is the people trying to trade perfectly good systems without the right trader skills that leads to so much disappointment. But this does not make the trading system a scam.

I believe there are far less Forex scams out there than people are lead to believe. The problem is people are looking for a “turn key” Forex solution (one they can trade like a pro from the first day). That kind of system really doesn’t exist. You only really need a trading system that has a positive profit expectancy if traded properly according to the rules. Then you just have to settle in to trading the system over and over again.

Every system has losing trades and “bad patches”. The trick is to gain confidence with the system you are trading so you will keep placing the trades in accordance to the rules and trading through the losses and bad patches. Once you have this confidence, you just need to keep on placing the trades according to the rules and you will eventually come out on top. Unfortunately, most people don’t trade a Forex system long enough to trust it and commence screaming “scam” after the first losing trade.

Another problem which leads to prematurely calling systems scam is having unrealistic expectations. This happens a lot of the time because people want to make a certain amount a month trade, but have such a small account that it is impossible. If you only have a 00 account, making 15% a month trading really doesn’t create a lot of income. But what about 15% of a 0,000 account? Don’t get me wrong, you don’t need a big account to start out with. As a matter of fact, I would advise starting with a smaller account and using compounding to grow it to a substantial account. The point is, when people find out they are not going to be making 1000% gain every month, they say the system is a scam.

In my experience, there are plenty of good Forex trading systems out there. If you have the trading mentality and skills to trade the system as designed, the system will provide profitable results over time. The trouble is, most traders don’t have the skill level or mental discipline to trade the system properly, especially when real money is at risk. This leads to less than desirable results. Basically, it is not the trading system that is at fault, but the person trading it. But since it is very hard to admit fault, they say the system is a scam instead of admitting they are lousy traders.

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Home Page > Finance > Currency Trading > Understanding Forex Trading Scams

Understanding Forex Trading Scams

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Posted: Aug 26, 2009 |Comments: 0
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A forex trading scam is any scheme employed by certain people to trick individual traders by trying to convince them of gaining a high profit margin by trading in the foreign exchange market. The forex market has long been plagued by swindlers able to prey on the gullible in order to defraud them of money. Gullible foreign exchange investors can be defrauded of thousands of dollars in a forex trading scam.
 
A typical case of a forex scam happens when investors are promised with tens of thousands of dollars in profits in just a matter of a few weeks or months in return for an investment of a thousand or so dollars. When an investor agrees to take part in the scam, the investor’s money is never actually traded in the forex market. It is usually diverted to an unknown account for the personal benefit of the scam instigators.

The nature of the forex market is that it is a zero-sum market. This simply means that whatever one trader gains, another trader loses. Unlike in the stock market, there is no instance that everyone profits in the foreign exchange market at any one time. There are always winners and there are losers, although it might not be on a single transaction.

Forex scams may be identified for their common characteristics. One of the obvious signs of such scams includes promises of large profits. Most forex scams try to attract unknowing victims by guaranteeing high returns for low risk investments in certain currencies. Masterminds of forex scams also use high pressure tactics to convince investors to immediately send money through money transfers or through overnight delivery companies.

These scams may come your way through advertisements in newspapers and magazines. Such ads promise high rewards for supposedly low risk investments in the foreign exchange market. Some scams may even make use of unsolicited phone calls to contact prospective investors and use their high pressure tactics to convince people to take part and invest in their scam.

One of the ways to avoid becoming a victim of such forex trading scams is by being aware of these signs. Another way is through a bit of investigation. Before investing on a supposedly attractive deal that you suspect to be a scam, try to investigate its background. Before you give any amount to a certain forex company offering highly profitable guarantees, try to check whether the firm involved is registered with the CFTC or the United States Commodity Futures Trading Commission or the NFA or the National Futures Association.

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Home Page > Finance > How To Avoid Some Common Forex Scams

How To Avoid Some Common Forex Scams

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Posted: Feb 11, 2007 |Comments: 0
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There is an old saying that states, “A Fool and his Money are Easily Parted”. With the proper strategy and resources from which to educate yourself, there is no reason to be foolish. With all of the opportunities to make money from home there are plenty of people who can’t wait to get right in and get started. The problem is, there are also plenty of scam artists out there who are all too willing to rip you off if you give them half a chance. In the Forex industry, experienced traders don’t fall for the scams, but people who are new to the industry are ripe targets. Therefore, you need to know what to look out for.

The government agency that regulates Forex trading, as well as other futures and commodities markets, cautions newcomers to watch out for the scammers that try to paint unrealistic pictures of huge profit potential in Forex and other trading markets. Recently they have also put out numerous fraud alerts for consumers specifically about scams involving the foreign currency exchange market. Here are a few of the tips from the CFTC to give you some insight on how to avoid scams.

First off, you always need to be wary of people who promise huge returns at low or no risk. If you see ads that say things like, “Make 00 in minutes” that is a pretty good sign that they are not a reputable company. A reputable company will always temper the allure of large profits with warnings that you can also lose just as big or bigger. The Forex market is not a cash cow; there are risks just as there is with any investment opportunity. People who are unaware of the risks involved usually quit trading when they begin losing money.

You were equipped at birth with the ability to question and reason. Use it and be suspicious of everything until you verify that a company is reputable. Use the CFTC and investigate the company or broker you are thinking of doing business with by checking their fraud alert pages. Another good thing to do is see if the company is registered with the CFTC or if they belong to the National Futures Association. By using these resources you can easily find out if there have ever been disciplinary actions taken against the company you are investigating. You can also verify addresses and phone numbers. With the ease of access on the Internet, it has become increasingly easy to run fraud scams with false credentials and fake names.

Just think about how easy it is to have an online presence now. A Domain name is less than ten bucks and you can get web hosting for less than a month. That is a pretty cheap investment for the opportunity to reach millions of people and part them and their money. Be sure to take the time to investigate and verify the people you are considering with the agencies I mentioned above before you give them any private information or credit card numbers. Forex trading can be a wonderful experience and business. Just make sure you work with a reputable company and do your homework.

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Gregg Hall is an author living in Navarre Beach, Florida. Find more about this as well as online Forex trading at http://www.FXTradingStrategies.com

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Adjustable Rate Mortgage Loan: How to Avoid Scams

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Home Page > Finance > Mortgage > Adjustable Rate Mortgage Loan: How to Avoid Scams

Adjustable Rate Mortgage Loan: How to Avoid Scams

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Posted: Feb 05, 2009 |Comments: 0
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If you are availing an adjustable rate mortgage loan, be informed about the various scams and frauds of ARM. Such scams can cost a homeowner his equities if borrowers do not avoid certain common mistakes.

How do scammers get borrowers’ information?

To prevent yourself from getting in any adjustable rate mortgage loan scams, it is most important that you know the scammer’s source of information. The scammers usually gather information from companies that keep personal records of individuals. They target people who have bad credit report or financial crisis.  

What are the tips to avoid ARM scams?

To avoid scams of adjustable rate mortgage loan, borrowers need to be careful and informed about the consumer laws. Given below are 4 tips to help you stay away from scams. 

Beware of lenders who refuse to disclose payment details: Before applying for ARM loans, do some thorough research about lenders and their payment details. Use internet to have a quick check on various lenders’ profile. The most common loan scam that lenders carry out is not providing detailed information initially but charging higher rates later. As per the laws, a mortgage lender is bound to provide you detail information about rates, fees and closing costs to the borrowers. If a lender is not ready to provide details of rates, fees and closing costs, don’t opt for loan from that lender.

Do not sign on any blank or incomplete document: If your lender wants you to sign on any documentation that is incomplete or false, be sure that he is up to some foul play. The lender can fill out the blank document as he wishes with higher interest rates and fees that can cost you the home. Providing false information can also land you in legal problems.

Beware of mortgage lenders who are too pushy: If a mortgage lender is trying hard to sell you their loan, be careful and never agree to the unfavorable terms of these “hard selling” lenders. Honest lenders will never try to up-sell a mortgage.

Beware of negative amortization: Negative amortization happens in ARM loans when the monthly payment does not include full due interest. The interest that is not paid is added to the principal balance which in turn increases your loan balance. ARM with negative amortization is known as Option ARM which is very risky as the monthly payments increase with the rise in interest rate as per market index. Dishonest lenders take advantage of this increase in rate to defraud borrowers. 

Before taking out an ARM loan, it is important that the borrower should understand the terms and conditions and have clear knowledge about the loan. He should be well aware of the consumer laws to fight back in case of scams. Only then he can avoid falling into ARM scams/frauds.

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Cachet Gomes is a contributing Financial Writer of Mortgagecases. With her knowledge on mortgage cases, laws and fraud related issues, she provides information on consumer rights, how to fight out cases and avoid being a victim of frauds.

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