The Informed Investor Promissory Note Scams Promissory notes can appear to be safe, lucrative investments. But many investors have been left with only broken promises.
Informed investors recognize that when an investment sounds too good to be true, it usually is.
An investor typically agrees to loan money to a company in exchange for the company's promise that it will pay back the amount, plus interest, over a specific time period. While legitimate promissory notes exist, they are not typically sold to the general public. Promissory notes marketed broadly to individual investors often turn out to be scams. The Connecticut Department of Banking, and securities regulators around the country, have recently received numerous complaints about promissory notes from investors. You can avoid becoming a victim of a promissory note scam by being an informed investor.