What is an investment scam?
This is an investment offer that does not exist. The scammer claims to represent a well-known investment company and offers an opportunity to an individual with claims of high returns that will never materialise.
How to spot investment scams:
Scammers repeatedly try to keep you engaged with their offer. They will also likely push you to make a quick decision.
They may use a name that may be easy to recognise, such as a well-known brand- except it isn’t the real thing. It may direct you to a fake website that looks extremely similar to the legitimate one. What will look different will probably be spelling errors on the site or another giveaway.
With investment scams, the scammer may threaten legal action if you want to pull out. This is something that a legitimate broker would never do.
The offer seems too good to be true- like promising returns that are unattainable in investment terms. You should always be wary of promises of guaranteed returns.
How the scammer lures victims in:
They will offer something enticing to get you to invest, such as:
- Quick returns
- Tax-free benefits
- High return schemes
- Opportunities for low risk
- Inside information on trades
You should do your due diligence by finding out what industry norms and trends are, so you don’t get caught in a scam.
How to get rid of investment scams:
Ask questions and check the credibility of those claiming to be brokers. If you find out that there is a scam, make sure that you inform others.
Watch out for urges to invest because “everyone is investing in this”.
Be wary of unsolicited offers and protect yourself online.
Watch out for phantom riches and be wary of guaranteed returns.