What Is Investment Scam and How Does It Work? The investment scam consists of making a juicy offer to invest in which they guarantee that you will obtain unreasonable returns. In general, nobody gives anything away and, above all, it is essential to ask yourself, where does the money for these benefits come from? The main argument to deceive and pressure the victim is that this opportunity is fleeting and will only be possible if you invest immediately. The method of operation of the investment scam is to call on phone and try to sell you investments in emerging markets that they claim will generate financial returns aboveestablished investment rates. In reality, the item they offer you may not exist or have no value. Scammers often give you specific confidential details that you might think only a genuine investment firm could have. They may have details of previous investments you have made, shares you own, and know your personal circumstances because they will have investigated to find out as much as possible about you before contacting you. Usually, to successfully carry out the investment scam, the scammers call several times, intending to form a trusting relationship. If you answer their calls, they will persist and try to build greater trust and even persuade you through Social Engineering to invest your money. After making some money, they will probably call again and try to persuade you to "invest" more money, perhaps in a different product. In an investment scam, scammers can claim to belong to a reputable investment firm, that they are stockbrokers or consultants. For this reason, it is essential to always seek independent financial advice before committing to any investment, including checking to see if they are a registered company. NEVER TRUST only company data.
Some Types Of Investment Scam Scams can take many forms, and scammers can develop new arguments or innuendo for the investment scam. But, although the hook can change, the most common scams tend to fall into the following general schemes:
Advance Fee Scam This type of scam is based on an investor's hope of reversing a previous investment mistake that involved buying stocks cheaply. The scam usually begins with an offer that tells you that you will be paid a temptingly high price for worthless shares. To accept the deal, you must pay an upfront fee for the service. But if you do, you'll never see that money again, or any of the deal money.
Investment Property The promise of making a quick buck through real estate-related investments continues to attract investors. Real estate investment scams are a permanent trap for investors. A scammer may, for example, defraud would-be investors by misrepresenting the underlying property's value or expected earning potential at the same time. Scammers can also misappropriate borrowed or invested funds or target unwitting investors as "bogus buyers" with outside banks or mortgage lenders, taking advantage of investor names and credit ratings to facilitate their scams.
Scam On Social Networks Social media allows people to connect faster and easier than ever. Investment promoters are increasingly online to find investors and their money. However, scammers infiltrate these social networks in search of victims. By joining and actively participating in a social network or community, the scammer builds credibility and earns the trust of other group members. The scammer has immediate access to potential victims through their profiles and takes advantage of the ease of sharing personal information to make a particular and skillful speech. The scam can spread quickly through a social network as the scammer gains access to the initial target's friends and colleagues.
6 Preventive Tips Against Investment Scam There are several ways to avoid becoming victims of the fake investment scam. The next time you receive an offer, be sure to take the following preventive measures: Ask questions: Scammers count on you not doing your research before investing. Defend your money by doing your own research, as scammers won't bother to provide you with information beyond the outright scam. For this reason, take the time to find the answers to your questions. Do your research before investing: Unsolicited emails, message board posts, and company press releases should never be used as the sole basis for your investment decisions. Meet the seller: Spend some time getting to know the person promoting the investment before investing, even if you already know them socially. You should always find out if the securities sellers who contact you are licensed to sell securities in your state and if they or their companies have had problems with regulators or other investors. Beware of unsolicited offers: Be especially careful if you receive an unsolicited speech about investing in a company or if you see it online, but you cannot find current financial information about it from independent sources. Pay special attention to foreign investment recommendations because it is more difficult to find out what happened and locate the money sent abroad if something goes wrong. Protect yourself on the Internet. Online and social marketing sites offer a host of opportunities for scammers. You must know what to look for before you invest in any opportunity.
At Cybera, we work to detect, prevent and provide fast legal services for financially motivated crimes like investment scams.