The next Bernie Madoff is knocking on your door. How do you protect yourself?

If you haven't read at least 25 articles about Bernie Madoff by now, you must be living under a rock (frankly, I am amazed how you could even have found my blog). It is a sad tale, a Ponzi scheme that in the end might total $50 billion in losses for unsuspecting investors. Look at that picture of Madoff and it is easy to imagine how that respectable, nice looking man swindled sweet old grandmas who didn't know better. However, Madoff didn't only go after this most vulnerable category, he targeted some of the worlds most savvy investors. The victims reportedly include financial institutions such as HSBC and Barclays PLC and charities such as the Jewish Community Foundation of Los Angeles.

How exactly did he do it? I'm not going to break it all down here - it's way too complex for me to understand. It will take teams of forensic accountants several months to decipher all of his methodologies, and you can bet that it will all be boiled down to an NBC Movie of the Week. Perhaps this drama is worthy of a theatrical movie directed by Steven Spielberg (another Madoff victim). I do know that his most powerful tool was Word of Mouth Advertising (WOMA). Every happy customer tells friends and family, and with the paper returns Madoff was showing, his customers were quite exuberant.

Imagine that your multimillionaire friend, uncle or mentor casually dropped you the line about Madoff. How could you possibly not jump at the chance to invest and get some of the action? In fact, you'd probably be mad that your uncle enjoyed 35 years of steady returns before he told you about this financial wizard. Forget about doing any due diligence, you'd be there with your arm extended, blank check in hand. You too would have been a victim.

While this is being referred to as the Ponziest of all Ponzi schemes, there are certain free websites you can search to limit your exposure when selecting a financial adviser. Although these aren't 100% bulletproof even if the adviser is listed, you should definitely raise a red flag if your adviser or broker does not appear on these sites. They are highlighted in Mary Pilon's recent Wall Street Journal article and include:

• Financial Industry Regulation Authority (FINRA) - According to the site, "FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services." Visit www.finra.org/brokercheck and check credentials of financial advisers, brokers and securities firms.


• Secuities Investor Protection Corporation (SIPC) - According to the site, "SIPC protects customers of broker- dealers as long as the broker-dealer is a SIPC member." To check verify this, visit www.sipc.org/who/database.cfm.


• U.S. Securities and Exchange Commission's (SEC) Investment Adviser Registration Depository (IARD) - Visit www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx to see if verify an investment adviser is registered with the SEC and to see if there are any disclosures about disciplinary events involving the adviser or its key personnel.

Although these Three Letter Acronyms (TLAs) can be confusing, the sites are quite simple to navigate. Spend a few minutes of time doing the due diligence and you'll severely limit your risk of becoming a victim. Too bad it's not this easy to pick winning stocks!

Next up: How can email save you money?

Do you have a promo code?

When buying online, you should ALWAYS search for a "promo code". Some sites call it a "promotional code" and others refer to it as a "coupon code", but they all add up to the same result for you - HUGE SAVINGS. There is a catch, not every site will be offering a discount when you buy. However, let's assume that you make 10 online purchases a year, spending an average of $100 each time. If you can find 10% off codes for half of those purchases, you'll save $50 a year. That's not too shabby for a few extra minutes of work.

If the code exists, finding it is simple. Let's say you can't wait to get a steal on that sexy new sweater vest from GAP. Simply visit Google, Yahoo or your favorite search engine and type in "gap promo code" or "gap coupon code". The search results will show tons of websites with names like CouponCabin.com, CouponCode.com, CouponHeaven.com - you get the point. Work your way down the list and see which has a current offer to save you money or get you free shipping. You'll quickly see there is a lot of repetition. Some sites display the promo code directly and you simply enter it when you complete the purchase online (or occasionally it also works for in-store purchase). However, it's more common that the site will direct you to GAP via a link, which is perfectly OK . In this scenario, clicking the link will take you to GAP and the deduction should automatically be taken when you checkout. GAP will pay a small referral fee to the coupon website - a win win situation for all.

Although coupon codes are not as common for travel, it never hurts to search for one when completing any online transaction. Now that the post Christmas sales are in full force, tis the season for online savings.

Next up: Do you use a financial adviser? Some basic steps that could help save you from the next Bernie Madoff.

What is The Vigilant Consumer?

BusinessWeek has written about Consumer Vigilantes, superhero-esque individuals who wage war against corporate America. After getting screwed one too many times by the likes of Comcast, US Airways or other companies, they fight back, armed with technology. Whether in the form of a YouTube video entitled Macbook Destruction or a website such as ComcastMustDie.com (it even has 2 different theme songs), these new tools of expression have liberated the fed-up customers, exposing their complaints to the masses.

As if the recognition and the internet fame are not enough, occasionally these ambitious revolutionaries are handsomely rewarded. Some get a fluffy letter with a formal apology from a corporate bigwig. Others receive an adjustment to their account (for the inappropriate overcharges). Or, drum-roll please, the lucky few score the holy grail of all the splendor, a coupon for savings on future services (you can detect the sarcasm here). Although I joke, many herald folks like Bob Garfield (founder of ComcastMustDie) as saviors who empower them with the tools to fight back. Hats off to Bob and these other Consumer Vigilantes who pave the way for those of us who don't have the time and energy to build a website or film a video every time a company doesn't deliver on its promise.

For The Vigilant Consumer, however, the "vigilance" comes first. It's all about proactive consumerism, tips and tricks that can prevent you from getting screwed in the first place. Protect yourself and get more for your money. If I've piqued your interest, please come back for more.

Next up: What you MUST do before making an online purchase. A few minutes can save you lots of money!