How To Avoid Money Investment Scams

Many people consider fraud as a “bad deal,” or “being ripped off,” and many victims of fraud blame themselves for not being able to see through the scam. No matter what it’s called, fraud is a crime as the perpetrators are stealing money from unsuspecting investors, and victims of fraud often see their lives ruined. Typically, these investment fraudsters prey on the inexperienced, but any investor can become a victim if the so-called “investment” vehicle is packaged attractively. Here are some financial self-defense tips to help avoid money investment scams:


Never, under any circumstances, give money to someone you don’t know who calls you out of the blue. Just hang up. Don’t be in a hurry to hand over your money. Take all the time you need to check out the investment, the person promoting it and their company. If a salesman tries to pressure you into taking immediate action you should run as fast and far possible as if you were playing Subway Surfers. Find out if the investment promoter is licensed by checking with the Securities and Exchange Commission, commonly known as the SEC. Virtually all investments professionals and opportunities must be properly registered with the SEC that conducts extensive background investigations on all licensed investment professionals and their firms.


Ask for a copy of the investment prospectus, which is a detailed outline of the opportunity, and review it warily, making sure you are aware of all the risks. However, bear in mind that even written material can be intentionally fraudulent to dupe investors. Stay in charge and take responsibility of your money. Don’t be fooled by anyone who asks for your money with the assurances that he, or she, is a financial professional and will handle everything. Be extremely cautious of anyone who suggests placing your money in an investment you don’t understand, and never allow yourself be cajoled into leaving everything in their hands. Instead, refer to the run fast and far rule.


Never judge someone’s integrity by how they dress, act or talk. Scam artists are smooth and know how to play their part, and far too many investors have been wiped out by a con artist who looked and dressed the part. Always remember that a sincere voice has no bearing on the reliability of an investment opportunity. Beware of salespeople who try to prey on your fears. Scam artists realize that many investors, and particularly older individuals, fear they will outlive their savings or are concerned their financial resources could vanish as the result of a tragic event.


Exercise extreme caution if you have little or no experience investing money. If an investment-scam artist is asked to describe his perfect victim he would most certainly say an elderly person whose spouse has died. Overall, the most prudent thing you can do to avoid money investment scams is to thoroughly educate yourself about the investment world. Remember, knowledge is power and the more you know the less likely you will be to fall victim.