A saying goes, “if something is too good to be true, it is!”. All investment frauds tend to start the same way. The fraudsters promise deals too good to be true that will enrich you overnight. Many people have fallen victims to investment scams, but you can avoid investment scams. Read on to learn how to avoid investment frauds below.
How To Avoid Investment Frauds
You might be wondering how people fall victims to investment scams, but it is no longer news that these fraudsters hit their targets with different techniques to get them to part away with their hard-earned money. Investment scammers promise their targets guaranteed returns on investments. They also promised incredible gain with little or no risk attached to it. Most investment fraudsters are Con men. They sweet talk their targets into getting scammed but do not be a victim.
Below are some of the types of investment scams that you need to be aware of.
- Ponzi/Pyramid Schemes: A Ponzi scheme is a fraud system where targets are promised a certain percentage or interest on the money they invest. The fraudster then pays a few marks to entice more people to invest. When the fraudsters accumulate sufficient funds, they abscond with the money, and their targets become victims of investment scams.
- Advanced Fee Scam: This investment scam uses a system where fraudsters ask targets to pay cash for high rates of return. When the money is spent, the scammers disappear with the funds received.
- Internet-Based Fraud: This investment fraud is made possible by providing fake trading schemes or Investors unknowingly patronize such methods and services lose their whole investments to fraudsters.
You can prevent investment fraud by making use of the following tips:
- Ask Questions: Asking questions is the first tip to avoid investment fraud. Always ensure that you conduct thorough research on any investment scheme before you invest your money. No matter the level of information a salesperson gives, ensure you do your independent and private investigation. If by any chance you cannot do the research, you can hire a private investigator to do the research or, better still, consult a business expert.
- Know the Sales Person: Another method to avoid being a victim of investment fraud is to ensure you know the salesperson. Ensure you make background checks on the salesperson and verify their information to avoid investment fraud.
- Unsolicited Offers: Another tip on how to prevent investment scam is to be wary of unsolicited offers. Be wary of investment pitches made to you out of the blues. Pitches that encourage investment in a company or an offshore investment scheme are scams. Make an investigation before investing your money in any investment scheme.
- Protect Yourself Online: Most investment frauds these days are online. You must protect yourself from investment scams, not just yourself but your money also from these online fraudsters. Make inquiries about all types of investment schemes online, and be very thorough about it because some scammers go the extra mile to put up fake websites and information online to make them look legit.
- Ask For a License and consult with Professionals.: When a salesperson approaches you, ask the person for their license and the particulars of their business. Consult professionals like lawyers, business consultants, and financial analysts or experts before you invest in any business.
Conclusion
Investment fraud is a crime that is rising daily, and victims of it are multiplying daily. This article has spelled out types of investment fraud and tips on how to avoid it. Now that you are better informed, you must use the information wisely.
Comments