10 Tips To Immediately Spot An Investment Scam

Business is all about investing money and generating profit. But sometimes we invest a lot of money without seeing it all the way through, and that is when investment scams can occur.

With the advancement of the internet & technologies, investment scams have become more sophisticated & explicit. By honing the convincing skills with fake promises, fraudsters take millions of dollars every year. When you finally realize something’s wrong, it’s already too late.

To be safe from these fraudsters, you need to have clear ideas about a few things, so hop on board as we will talk about ten steps to spot an investment scam.

Source: Nestegg

1. Don’t Respond To Cold Callings

One of the most common tactics of investment scams is the unsolicited approach. The fraudsters will reach out to you unannounced. You don’t need to stumble upon them. They will contact you suddenly with phone calls, text messages, email, or by visiting you.

If they visit you, they will look very professional and will try to imply their convincing power.

You may hear about some astounding investment plans that will bring you a fortune in no time. However, if you feel interested, listen but don’t make any haste, on the spot decision.

If the people truly belong to a legitimate farm, they will give you enough time to assess & decide. Pressurizing you is suspicious. If you are supposed to make sudden investments right then and there, don’t do it!

2. Don’t Fall For Something Too Good To Be True

A groundbreaking technology. A life-changing scheme. These are phrases many fraudsters use to trick people.

Be skeptical if they try to convince you by showing their history of profits month after month. Keep yourself updated with the latest market information at all times. You can also consider following the No BS IM Reviews blog to know about the latest trends and scams

Most of the time, fraudsters use Ponzi schemes. These are the schemes that allow quick and high returns in order to make money from a new investor to pay the previous investor’s debt.

However, when the scammer is out of investors, they take the money left with them and vanish into thin air. The only thing left will be you and your empty wallet.

Source: Evolution Financial Planning

3. Stay Away From Quick Investment Tactics

A legitimate business will never run out of time. They will have plenty of time to reassess all the potential buyers. Besides, their scheme will likely be on the market for a long time if it’s profitable enough.

Nonetheless, these farms or companies will never tell you to invest right now without even investigating correctly.

So if you come across someone who is talking about fancy profits at none/shallow risk, think again. You should be even more concerned if they suggest you invest immediately.

Letting you do a background check to ensure their legitimacy is their first job. If they miss out on that willingly, you should back off.

4. Offering Tours, Fancy Lunch, or Commissions

No well-established company provides the promises of commissions to a particular client, let alone tours & lunches. If you get such a proposal, be skeptical about it.

Usually, companies with an excellent reputation or success don’t need to contact customers personally. Customers come to them. Even if they are communicating with you out of customer care or support, they will never propose any commission.

Investor scams use these tactics to enlarge their potential investor circle. That’s why they target a circle of an investor and show their information as a referral. Never make any decision without checking their background first.

Source: Moneycourier.com

5. Verify Fictitious Records

Fraudsters often come with certifications of various awards & accolades. They may also try to convince you by showing the yearly profits of some of their investors, which are usually fake.

Again, the cunning scheme of showing some of their “satisfied customer” testimonials may entice you into trusting them blindly.

No matter what fake scheme they use to persuade you, do your homework of checking their background before making any official investment.

6. Confirm How They Are Regulated

Fraudsters often try to convince you by adopting the fake representative of any distinct company or farm. They can easily duplicate the credentials, visiting cards, and information.

While encountering such situations, it’s better to double-check their legitimacy. Unsolicited contacts are never the characteristics of a reputed organization.

Be sure to contact the authorities directly about their representatives. Financial Industry Regulatory Authority (FINRA) checks for the regulated companies in the USA.

Source: MoonCatcherMeme

7. Ignore If They Claim Insider Information

You probably have seen the movie The Wolf of Wall Street. Remember the character Gordon Gecko? The reason behind mentioning this character is that that guy earned fame & money by conducting security fraud.

In the end, he was arrested by the police. However, the technique he adopted was to deliver insider information to the interested parties.

If anyone approaches with such a scheme, deny it at once. Getting involved in such activities is a crime in the USA.

8. Beware Of Major Investment Tactics

Don’t invest just because everyone is saying so. Regardless of the documents, they show you, don’t believe this to be true right away. The information of the customers can be wrong, and there’s no guarantee of the satisfaction of the customers.

Older adults are likely the prey of these fraudsters. They get a lump sum of money after pension, and that’s when these fraudsters try to persuade them to invest.

Source: Invest In Blockchain

9. Never Trust A Referral

Don’t jump right into their traps just because someone you know is involved in it. There is every chance that they bribed your neighbor or friend to make you invest in them.

A whole network of fraud is connected here. So, don’t believe whatever they say. Again, confirm their legitimacy first, then decide.

10. Watch Out For Third-Party Accounts

A reputed firm or company will have an independent account. They won’t need to temporarily hire someone else’s account to conduct business as they will have thousands of customers.

So, while tracking your money, if you notice your money is in someone else’s account, contact them immediately. It’s better to have clarification before even conducting the deal.

Never believe their assurance of using a third-party account whatsoever.

Source: SmallBusiness.co.uk


Investment scams are easy to detect if you consider all of the above-mentioned tips. All you have to do is take some time to clearly think about the investment opportunities that lie in front of you and take professional advice.