How to Avoid Glamorous Scams.

Investment opportunities in the entertainment industry may sound glamorous, cutting edge, and can't miss, but films, infomercials, and the Internet are among the most risky of ventures. "Potential investors need to be on alert for grifters who take their money and promise the gold, glitz, and glitter we all associate with the entertainment world," cautions Jodie Bernstein, director of the Federal Trade Commission's Bureau of Consumer Protection. "Unfortunately, titanic profits are reserved for very few investors or groups of investors--generally, people who know the industry very well and who take a very cautious and studied approach to investing," she says.

Promoters often invite consumers into the "lucrative world of entertainment" with promises of projects that "have already generated profits for industry insiders." Many movies never make it to a theater, though, let alone television or video distribution. Even if a film succeeds at the box office, financial backers usually are the last to recoup their investment from the project. Pitchmen also hawk the profits to be made in special-interest television programming, but the success of any new network venture requires a rare combination of creative programming, an ability to get access to cable systems, and being able to draw viewers and advertisers.

In addition, fraudulent telemarketers are hawking "opportunities" to invest in Internet gambling...