How to Avoid Investment Fraud

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Everyone wants to invest and grow their money. For this reason, fraudsters take advantage and come up with fraudulent investment opportunities. Even the most educated and exposed people fall for these scams. The worst thing about investment scams is the fact that they keep changing.

Fraudsters keep coming with new ways of scamming people, and it is sometimes difficult to differentiate a scam from a genuine investment. However, there are still some scams that have been there for years, and they are still common. Here are some tips to help you identify an investment fraud:

Low Investment, High Returns

The first red flag to help you determine an investment fraud is a low investment, high returns. Once you notice that the investment offers you extremely high yields, it might be a scam. There is no way you can get double of the money you have invested in a month.

The low investment, high returns options are meant to entice the victims. They invest look rosy so that they can attract as many people as possible. The perpetrators accumulate a lot of money from ignorant investors.

Sales Person Overselling

If the salesperson is overselling the investment, there are chances that it is a scam. Salespersons are known to be pushy, but it should be to a certain level. There are times when the broker will start telling you how the opportunity is running out.

The broker might even convenience you to put a booking fee to secure your position for the investment. Once the broker starts being too pushy and calling every day, you need to watch out. A good investment is supposed to attract investors on its own.

Friendly Investment Broker

handcuffs and moneyInvestment brokers are friendly and sociable people. However, the broker should not be too friendly and trustworthy. If you suspect that they are too friendly, they might just be trying to win your trust.

It is essential for the broker to understand your boundaries and need for privacy. If the investment broker is trying to be your friend in the process of pitching the investment, it might be a red flag.

Undisclosed Information

A good investment broker is supposed to disclose all the information that you need to make a decision.

If the broker or salesperson is hiding some information, do not make a mistake and invest with them. Everything should be clear and proved beyond any reasonable doubt.

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