There are various methods that a criminal can use to commit fraud and scams. An investment scam occurs when a scammer puts pressure on people into buying investments and promises higher returns. In reality, such investments are non-existent and worthless. The most common type of investments scams are related to financial markets such as shares, bonds, commodities, property, etc.,
Investment frauds can be sophisticated and not easy to spot. Criminals involved in such frauds are experts in mimicking people, organizations, and authorities. They spend hours researching their target, hoping that he/she will let their guard down. Fraudsters can also appear well-informed and articulate. They use credible websites, materials, and testimonials to convince the victim of their legitimacy.
Spot the warning signs
- Investment scammers use a variety of techniques to steal your money, and regularly target investors who are experienced. They may:
- Make unexpected contact about an investment opportunity via email, cold call, etc.
- Apply pressure to invest in a limited-time offer scheme, offer a discount to invest before a set period, or may say the offer is only available for a short time.
- Promise attractive returns that sound too good to be legit, also offer better interest rates as compared to others.
- Try to convince you by saying that the offer is only for you, or also ask not to share it with anyone else.
How to avoid investment scams
- Reject unsolicited investment offers
Before making any final decision stop and think about the opportunity you got out of the blue. Reputable companies are less likely to make cold calls. If you receive a call, email, or text from someone you do not know, the safest thing is to hang up or ignore the messages.
- Check the FCA Registry and warning list
Check the FCA Register before investing any money to find if the firm or individual you are dealing with is authorized or not. Also, check the FCA Warning List of the companies to avoid.
- Take Third-Party Advice
If you do get interested in an investment scheme, talk to a third person who can advise you on the matter. Contact your attorney, regular stockbroker, or any other trustworthy consultant.
- Know the salesperson
Spend time checking out the sales agent touting the investment offer – even if you know the person. Always check for the license of people who are selling securities and also check whether they are regulated or not.
- Ask Questions
Fraudsters prefer people who show no willingness to investigate before investing. Fend them off by doing your research about the company and the seller. Spend time doing your independent research before investing in the offer.
- Watch out for online scams
Social media is the most accessible medium for scammers to promote their scams online. Whenever you come across any investment opportunity, do your research and see the offer with skepticism.
Where can I go for help?
If you have any questions or concerns about an investment offer, or you think you might have encountered a fraud, please contact your state securities regulator or authorities. Also, you can contact us for consultation on the case.
T&H consulting offers the first free consultation on various scam and fraud-related matters. To talk to one of our specialists please fill the form below.
