SCAM

An investment scam is a fraudulent scheme designed to trick individuals into investing money with the promise of high returns, but the perpetrators either steal the funds or use them for purposes other than those stated.

These scams prey on people’s desire to grow their wealth and often use deceptive tactics to appear legitimate.

COMMON CHARACTERISTICS OF INVESTMENT SCAMS:

1. Guaranteed High Returns: Promises of unusually high or guaranteed returns with little or no risk.

2. Pressure Tactics: Scammers may push for immediate decisions, claiming the opportunity is limited.

3. Unregistered Investments: The investment may not be registered with appropriate regulatory bodies.

4. Lack of Transparency: Scammers provide little information about how the investment works or where the money goes.

5. Pyramid or Ponzi Schemes: Some scams involve paying returns to earlier investors using funds from new investors rather than actual profits.

6. Fake Credentials: Scammers may claim to be professionals or use fake licenses and endorsements.

COMMON TY0ES OF INVESTMENT SCAMS:

1. Ponzi Schemes: Returns to investors are paid using funds from new investors, rather than from profit earned.

2. Pyramid Schemes: Participants recruit others to invest, and profits are earned through recruitment rather than a legitimate business.

3. Pump and Dump Scams: Fraudsters artificially inflate the price of a stock and sell their shares at a profit, leaving others with losses.

4. Cryptocurrency Scams: Fake ICOs (Initial Coin Offerings) or fraudulent crypto investment platforms promising massive returns.

5. Offshore Investments: Scams involving foreign investments that promise tax benefits or high returns but are unregulated and risky.

HOW TO SPOT & AVOID INVESTMENT SCAM:

▪︎ Verify Legitimacy: Check if the company or individual is registered with financial authorities.

▪︎ Research: Look for reviews, complaints, and other red flags about the opportunity.

▪︎ Avoid Pressure: Legitimate investments do not require rushed decisions.

▪︎ Understand the Investment: Be clear on how the investment works and the risks involved.

▪︎ Seek Professional Advice: Consult a financial advisor or lawyer before committing.

If you suspect an investment scam, report it to your local financial regulatory authority or consumer protection agency.