Investing your money is a prudent and wise thing to do. Unfortunately, many unscrupulous actors will try to take away your hard-earned money and leave you with nothing. Being cautious and aware of the scam tactics that con artists use in investment scams is your best line of defense against financial scammers.
Before you invest with anyone or any company, you should do a background check on them. Make sure they are registered and licensed to sell you investment products in your state. The SEC has free tools available at Investor.gov to help you find out more about the person or company. Only invest in people who have a clear background check and are licensed and registered. You should also lookout for any disciplinary action and lawsuits that a person or company may face or have had in the past as it could be a warning sign.
Even if you do a background check and look at the history of the person or company that offers investment opportunities, it is still a wise idea to be aware of the many tactics fraudsters will use to steal your money. One of the most common tactics investment scammers use is the get rich quick scheme. These fraudsters promise quick and easy returns with little or no effort on your part. They may promise you the chance to live a lavish lifestyle if you invest with them. Remember, if it is too good to be true, it probably is.
Investment scammers often try to create a sense of urgency. They may say that investment opportunities are limited or that you must act now or the investment opportunity will disappear. Don’t fall for a sense of urgency. The scammers are just trying to get you to part with your money as quickly as they can. Legitimate investment opportunities will give you plenty of information and not rush you into acting right now.
Many investment scams use fake testimonials. They will have paid actors say they made millions of dollars by investing in this product or with this person. The testimonials may feature outrageous claims and have images of investment accounts that have millions of dollars. Don’t make investment decisions solely based on testimonials. Keep in mind that the images of investment accounts with millions of dollars have probably been edited and are fake.
By doing background checks and research, you can usually see if an investment opportunity is legitimate or not. You should also be cautious and skeptical of testimonials, a sense of urgency, and get rich quick schemes. Be prudent, and don’t be afraid to avoid opportunities that seem too good to be true. They probably are a scam.