Investment fraud happens when scammers trick people into investing money. Scammers can provide people fake information about a real investment or create a fake investment opportunity. Often senior adults are common targets of these scammers as they have significant savings or own properties. The financial consequences of investment frauds can be devastating, leaving people without their savings and jeopardizing their chances of having a secure retirement. Here we share tips to avoid investment fraud:
1. Be wary of unsolicited offers
Most investment scams start with promotion, advertisement, phone calls, or an SMS. The purpose of the promotion is to make people believe that there is an exciting opportunity that requires them to act soon or otherwise they will miss it. One should think carefully before sharing personal details.
2.Do homework before investing
Scammers are counting on people not to ask too many questions before they invest. People should take time to understand what the company seeking investment does before investing. They can also look for the company’s financial statements on the SEC’s EDGAR filing system.
3. Do the background check of the person asking for your money
People should spend some time checking out the salesperson seeking the investment. First of all, it must be ensured that the person is licensed to sell securities. Second, people must check whether the company or companies the salesperson represents have had l with legal issues with regulators or other investors.
3. Protect information online
Scammers can use information online to seek confidential information that they can misuse. Online scams usually begin with an email that looks as if it is from a legitimate source, often a financial institution. The email contains a link to a fake website that looks like the real site. Fraudsters dupe people into providing account and password information, and then they have access to their accounts.
This is why confidential information such as account information, Social Security Numbers and bank information should not be shared on social media or online without verifying the authenticity of the website.
4. Learn about different kinds of investment frauds:
Investment fraud comes in many forms. Affinity fraud, chit funds, high yield investment programs, and Ponzi schemes are some of the common investment frauds. Once people know how these investment frauds work, they will be able to see the red flags before it is too late. Here are some common red flags to watch out for:
- The scheme sounds too good to be true. Any investment opportunity that claims people will receive a significant amount of money is a sign of either extreme risk or outright fraud.
- Every investment carries some degree of risk. However, most scammers dupe people with the promise of “guaranteed returns” or “gains at no risk”.
- Scammers often use the pitch that “Everyone is buying it”. People should be wary of such pitches and take time to do some due diligence before signing up for anything or transferring money.
Looking for an investment fraud lawyer?
If you are looking for an attorney who has worked on financial crimes related to investment, get in touch with David L. Fleck. He has represented many victims of investment frauds and got them just awards.