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How To Spot Investment Scams and Frauds
Beware of Investment scams because they are on the rise nowadays. Here are some of the best ways to spot investment scams and frauds
Beware of investment scams because scammers and fraudsters are everywhere looking for potential victims. These criminals have sophisticated tricks to scam you.
Investment scams are so rampant nowadays and you may become a victim if you are not careful enough. The scams come in different forms and they are usually presented in unsuspecting manners.
This is why you have to be very careful, especially, when dealing with people you don’t know. Even experienced investors can fall victim to these scammers and fraudsters.
Have you received a call from an unknown person telling you about an investment opportunity? Be careful so that you will not fall victim to these criminals disguising themselves as genuine companies or businessmen.
What’s investment scams?
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An investment scam is a way of selling dubious business ideas to you in order to do away with your money. Investment fraud is everywhere and it comes in all kinds of forms.
Fraudsters will claim to offer high returns for every little risk and they often use false testimonials to convince their victims.
In some cases, these fraudsters also use fake celebrity endorsements, spoof websites, and other marketing strategies to make the scams look legit to unsuspecting victims.
Common investment scams
Investment scams come in all kinds of forms. It could be pension funds, investing in cryptocurrencies, forex trading, property, hotels, and binary options. Scammers often have convincing social media profiles or websites with bogus reviews.
It’s up to unsuspecting victims to their own instincts anytime they come across too-good-to-true deals or offers. Below are some of the common investment scams you should know so as not to fall victims. This will help you to find out what to look out for and how to avoid being scammed.
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#1]. Pension fund scams
Pension scams are common nowadays and scammers have gimmicky means to attract potential victims. Scammers are targeting pension savers with bogus investment opportunities as they are more vulnerable.
They persuade pension savers to invest their money in unusual high-risk investments. Such investments include renewable energy bonds, forestry, parking, storage units, overseas property, and hotels. The fraudsters will make attractive offers and promises they have no intention of keeping.
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#2]. Cryptocurrency scams
Did you know that over £27 million was lost to crypto and forex investment scams between 2018 and 2019? Fraudsters often use social media to promote their dubious online trading platforms.
They also use fake celebrity endorsements and images of luxury items to persuade unsuspecting victims to invest. If scammers are able to persuade you to invest in their fake bitcoin investments, they will want you to invest more or introduce friends and family with the false promise of greater profits.
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#3]. Foreign exchange / Forex trading scams
The Forex market is a legitimate trading market where you can trade the world’s currencies. However, there is no regulated exchange and scammers are taking advantage of the situation to dupe traders.
Scammers can easily entice unsuspecting victims with fake Forex trading offers. In fact, traders with no experience are more vulnerable because of their desperation to enter the market. Scammers can target these traders and scam them with a high yield investment programme offers.
What is a high yield investment programme (HYIP) and how does it work? They are Forex Ponzi schemes in which a high level of return is promised for a small initial investment into what is, in fact, a Forex fund.
How to spot investment scams
Fraudsters are everywhere on the internet including Facebook, Instagram, and Twitter. Predators are using these social media platforms to lure people into all kind of dubious investment opportunities.
Investment scams and frauds are usually designed to look like genuine investments. This is how the scammers can convince their victims to invest in their dubious investments.
This is why it’s usually difficult for victims to spot the scams. These kinds of scams are getting harder to spot nowadays because people are desperate to make money. However, below are some telltale signs to help protect your hard-earned money.
- Unexpected contact: Scammers usually contact their potential victims by telephone, email, and text message offering an investment opportunity.
- No callback: In most cases, scammers often want to be the ones making all the calls. They’ll never give you a chance to be able to contact them. So, beware of a ‘company’ that won’t allow you to call back.
- Quick decisions: You feel pressured into making a quick decision, for example, if the caller uses such marketing phrases as the offer is “only available right now” or “don’t miss out”.
- No physical address: The only contact you are given is a mobile phone number or a Post Office Box address.
- Unbelievable offers: Beware if the opportunity seems too good to be true or offers high returns for a low risk.
You should always report scams
If you have been scammed or you are suspecting a scam, it’s important you report it to the right authority. You should report fraud and cybercrime that has already happened to Action Fraud if you’re in England, Northern Ireland, or Wales.
Call Police Scotland on 101 or Advice Direct Scotland on 0808 164 6400to report scams. Reporting scams will allow authorities to investigate and prosecute scammers. It also lets law and policymakers get a clearer picture of the effect that scams have on pensions.
If you’re concerned about a potential scam you should report your suspicions to Action Fraud (in Scotland: Police Scotland or Advice Direct Scotland) or the Financial Conduct Authority. You can also report any intelligence or concerns by contacting Action Fraud.
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