Ten Tips to Identify Investment Scams

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It is all about making money and investing. Sometimes, we don’t see the whole picture and invest too much money. This is when investment frauds can happen.

Investment scams have become more complex and explicit with the development of the internet and technologies. Fraudsters make millions every year by convincing people with false promises. It’s too late when you realize what’s wrong.

You can avoid these scammers by having clear understanding of a few things. So let’s get on board and we will discuss ten steps to identify an investment scam.

1. Do not respond to cold calls

The unsolicited approach is one of the most popular investment scams. Unannounced, the fraudsters will contact you. They don’t have to be found. They can contact you by phone, text, email, or visiting you.

  • They will appear professional when they visit you and try to convince you.
  • There are some amazing investment strategies that can make you rich in no time. If you are interested in learning more, please listen, but don’t rush to make a decision.
  • If they are genuine farm workers, they will allow you to evaluate and make a decision. It is not a good idea to pressurize you. Do not make sudden investments.

2. Do not fall for something too good to be true

  • This is a revolutionary technology. This is a life-changing technology. These are common phrases used by fraudsters to con people.
  • If they attempt to convince you with their track record of profit month after month, be skeptical. You should keep yourself informed about the most recent market information. To keep up with the latest scams and trends, you can also follow the No BS IM Reviews blog.
  • Ponzi schemes are used most often by fraudsters. These schemes allow for high returns and quick cash flow to enable investors to repay the debts of the previous investor.
  • The scammer will take all the investors’ money and disappear into thin air. You and your empty wallet will be all that is left.

3. Avoid Quick Investment Strategies

  • An honest business will never run out time. They will have ample time to evaluate all potential buyers. If it is profitable, the scheme will be available for a long period of time.
  • These farms and companies won’t tell you to just invest now, without doing proper research.
  • If someone is talking about making huge profits with little or no risk, be wary. If they recommend that you invest immediately, be more cautious.
  • You should let them do a background check in order to verify their legality. You should not let them go if they refuse to do it.

4. Offers tours, fancy lunch, and commissions

  • A well-established company will not promise commissions to a specific client. Be skeptical if you receive such a proposal.
  • Companies with a strong reputation and success usually don’t have to personally contact customers. Customers will come to them. They will not offer any commission, even if they are communicating with customers for customer support or customer service.
  • These tactics are used by investor scammers to increase their potential investor network. They target investors and offer their information as a referral. Do not make any decisions without verifying their background.

5. Verify Fictitious Records

  • Many fraudsters will provide certificates of awards and accolades as proof that they are legitimate. You may be convinced by them showing you the annual profits of some of their investors. These are often fake.
  • You may be tempted to trust them blindly by their clever scheme of showing testimonials from satisfied customers.
  • Do your research on the background of any person you are considering investing in, regardless of how convincing they may try to convince you.

6. Check out How They are Regulated

Many fraudsters will try to convince people by pretending to be a representative of a company or farm. They are able to easily copy the credentials, visiting cards, information, and other details.

It is better to verify the legitimacy of such contacts when you come across them. It is not a sign of a well-respected organization to have uninvited contacts.

Make sure you contact the authorities directly to inquire about their representatives. Financial Industry Regulatory Authority, (FINRA), checks for regulated companies in the USA.

7. Do not listen to them if they claim insider information

  • Most likely, you have seen The Wolf of Wall Street. Do you remember Gordon Gecko, the character? This character is mentioned because he was a security fraudster who earned him fame and money.
  • He was eventually arrested by police. He used an insider technique to provide information to interested parties.
  • Do not allow anyone to approach you with such a scheme. In the USA, it is a crime to get involved in such activities.

8. Avoid major investment tactic

  • Do not invest because everyone says so. Do not believe everything they say, regardless of what documents you see. Customers’ information can be incorrect and customers may not be satisfied.
  • These fraudsters are most likely to target older adults. These fraudsters attempt to convince them to invest by giving them a lump sum after they have retired.

9. Never trust a referral

  • Do not fall for their traps simply because someone you know is involved. They may bribe your friend or neighbor to get you to invest in them.
  • Here is where you will find a whole network of fraud. Don’t believe anything they say. Once again, verify their legitimacy and then make your decision.

10. Be on the lookout for third-party accounts

  • An independent account will be available to a well-respected company or firm. They will not need to temporarily use another account in order to do business.
  • If you find your money in another account while tracking it, get in touch immediately. It is better to get clarification before you even make the deal.
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