A survey of state securities regulators conducted by the North American Securities Administrators Association (NASAA) finds promissory notes to be the most frequently identified source of current investor complaints or investigations.

According to NASAA, 74% of regulators identified promissory notes as one of their leading sources of investor issues.

“In today’s ongoing environment of low interest rates, the lure of high-interest-bearing promissory notes continues to tempt investors, especially seniors and others living on a fixed income,” says Joseph Borg, president of NASAA, and Alabama Securities Commission director.

Retail investors should be particularly leery of short-term notes, which are the source of most of the fraudulent activity involving promissory notes, Borg says.

The survey also finds that 54% of regulators identified Ponzi schemes and real estate investments as the second biggest source of complaints, followed by oil and gas-related investments (50%), affinity fraud (28%) and variable annuity sales practices (26%).

Looking ahead to 2018, NASAA identified three emerging threats to investors: initial coin offerings (ICOs); cryptocurrency contracts for differences (CFDs) and investment-related identity theft.

“Technology, and in some instances the criminal misuse of technology, is at the heart of each of the emerging threats investors are likely to face in the coming year,” says Keith Woodwell, NASAA Enforcement Section chair and Utah Securities director.

Woodwell notes that state and provincial securities regulators believe that fraudsters are launching a new wave of schemes involving ICOs and cryptocurrency-based CFDs, which allow investors to speculate on highly volatile cryptocurrencies such as bitcoin or ethereum.

“These speculative, high-risk products are prohibited in the United States for a reason; they are not suitable for investors,” Woodwell adds. “There are red flags waving everywhere.”

“All investments involve a degree of risk. Investors can help protect themselves by taking time to research both the investment product and the person selling it. It’s best to learn before you get burned,” Borg says.