Understanding Investment Scams
What are Investment Scams?
Investment scams lure victims with false promises of substantial returns. These scams may involve traditional investments, such as stocks, real estate, or precious metals, as well as newer assets like cryptocurrency. Fraudsters often advertise through infomercials, online ads, and free products or events to appear legitimate. In some cases, they establish relationships through dating forums, building trust before turning the conversation toward investing and financial decisions.
Red Flags of Investment Scams
- Promises and/or guarantees for large profits or returns.
- Claims that there is little risk to the investment strategy.
- Claims that it takes no time at all and very little effort.
- Vague descriptions provided when questions are raised.
- Claims there are secret methods or have a proven strategy to earn large profits or returns.
- High-pressure sales tactics applied.
- Discouragement for researching the offer further.
- Being encouraged to move conversations when engaging online, to other forums such as text or other communication apps, especially group chats that oftentimes are impersonating “happy clients.”
- Romantic online relationship that turns into a financial investment discussion.
- Requests for taxes and fees to be paid in full to the “fraudster” before withdrawals are allowed.
Guiding Principles for Fraud Prevention
Review the tips below to avoid becoming a victim of Investment Scams.
