Regardless of raised consumer awareness, people are still prone to investment scams and fraud, and even more so during times of financial turmoil. In more recent times scams have become more sophisticated due by and large to advances in technology and artificial intelligence. As a result, scams have become more cleverly disguised and harder to discern. However, despite the fact that scamsters have become savvier, there remain steps you can take and things to be aware of in order to verify if you’re about to be scammed or not.
Anyone touting an investment opportunity that guarantees returns much better than what the investment market would be completely and utterly ignored. Should the investment purport to double or triple your money within a very short span of time, then this alone should send a clear sign to ignore it. Even companies listed on the FTSE 100 and other major markets cannot legitimately make such bold claims. A common problem with high and quick return investment opportunities is that they’re often hidden behind what can appear to be a fair amount of legitimacy. The so-called investment firm might have a working website, other clients, and friends of yours who have seen their money grow within its financial confines. This type of method is used to build a false sense of investor confidence before the rug gets pulled out from underneath everyone. Always remember, if there are guaranteed high returns in a quick span of time, something’s very wrong.
Beware of the jargon
The type of marketing jargon used by an investment company can also be a dead giveaway with regards to being legitimate or a scam. Typically, fraudulent investments are renowned for tired yet still enticing classics like ‘elite’, ‘select’, ‘limited time’, ‘limited offer’, ‘exclusive offer’, and ‘the opportunity of a lifetime in their attempts to lure you with their marketing material. If you’re looking to spot a scam off the bat, always look at the jargon.
The use of free email accounts
Any investment company that communicates with you by way of free email services such as Hotmail, Yahoo or Gmail has got to be watched with a cautious eye. A legitimate investment company would firstly operate solely from a secure and/or registered email server and in addition, would not give customer information to any organization or financial entity making use of free email servers.
A request for private information
You should regard any unsolicited text message, email, or phone call that asks for your participation in a scheme as questionable. However, if such messages ask that you provide personal information, then no further interaction should take place. Bank account details, identification numbers – are often required. Fraudsters have upped the ante too. Quite often they’ll send you an email with all your banks ledgers and logos. Usually there’s a link embedded in the email and the idea is for you to click on the link and follow the instructions. No bank or legitimate financial institution will ever ask you to submit personal information.
Pay and receive
These schemes have become quite sophisticated and often employ social media platforms such as Facebook in order to entice would-be participants. The basic premise is to make you pay some kind of up-front fee or a buy-in in order to receive a prize or membership. The most advanced method being used by fraudsters is to use duplicate accounts of friends you have on Facebook to inform you of a recent investment that yields massive returns or even a prize that they recently won. Your “friend” then directs you to a website that corroborates the information they conveyed and asks that you simply make a deposit to cover the shipping or cash transfer costs. Needless to say, you never receive what was promised.