Investing Scams

Investment scams |

Investing Scams

You have some cash and want to make some money through investing. You found some sites that are very convincing and have good online presence, and look like a legitimate company. The investment program offers a high return on your investment, but are told it’s low risk. If you have retired, please be watch out as senior investing scams are on the rise. Many financial fraudsters use sophisticated and effective tactics to get people to part with their money.

Internet Frauds Scams

Today, due to the internet and digital communications, internet scams become a worldwide financial game and be much more complex. Some of these scams are so convincing, even professional investors have fallen victim to them.

Investment scams aim to get unsuspecting people to hand over money. On the face of it, they appear legitimate, knowledgeable with websites, testimonials and marketing material.

The famous internet investment scam is a Ponzi Scheme, where money is collected from new investors to pay previous investors. Eventually the money owed is greater than the money being collected and the scheme collapses, leaving all the investors out-of-pocket.

Trading Binary Option Scams

Binary options are a class of options which is extremely simple to use and understand functionally. The most common binary option is a “high-low” option. The option has expiry date or time and a closing price at expiry. If an investor or trader able to predict the movement correctly, the investor will get paid a fixed percentage of return or nothing at all.

Trading Binary option scams are a very common nowadays because people could see how easily by investing $250 and you will be making $1,000 in short period. Here are the 4 step process

  1. Company opens a website that looks like a reputable binary options broker.
  2. They show example of trading signals software that promises 85-90% accuracy.
  3. You believe and put in your initial deposit of $250 and you lose.
  4. You then receive a phone call from a “senior trader” persuade you to invest more like $5,000 and you let the trading software does the job, and lose most of your money fast !     

Forex Trading Scams

The foreign exchange (forex) market is considered to be the largest and most liquid financial market in the world. Investors buy and sell currencies with the aim of making money on changes in exchange rates. Forex ads promote easy access to the foreign exchange market and make money through signals or software.

However, foreign exchange trading is dominated by large, highly trained staff from the international banks with leading edge technology and large trading accounts. It’s extremely difficult to consistently beat these professionals. Because forex trading services are often operated online from another country, unregulated firms may be marketing their services and you may be asked to wire money into an offshore account before you begin trading, where the money will be inaccessible. In any of these situations, you’re likely to lose your investment money.

Signs of investing scam

All investment scams have one thing in common. They claim to be able to offer high levels of return and all investment fraud follows a proven formula to take away your money by invoking the following principles:

  • Marketing Appeal : The marketing pitch is designed to attract investor into a get-rich-quick without much risk or hard work. Above market returns, guarantees, low or no risk. Investment scams appeals to the basic human emotions of greed, and wanting something for nothing, so that you’ll make an irrational decision. Scammers play on the fact that many people would love to get rich quickly by learning how to make money with minimal effort.
  • Unverifiable Claims: Secrets of the rich, technological breakthroughs, special mathematical algorithm, government conspiracy theories are things that are either hard to verify, or not verifiable at all. Another thing is fancy words and successful images are designed to win your trust by creating a façade of sophistication. Some even did multiple postings on internet under various aliases to create the appearance of many good reviews.
  • Sales Practices: Rushing you into decision, but telling you not to miss the golden opportunity and act Now in order to circumvent the investor rational thought process. You will find the investment often come with inadequate information, little disclosures, non-traditional payment choices, encouraging you to invest based on trust are all typical of manipulative investment sales practices that deviate from proven professional standards of conduct.
  • Lack Of Transparency : All investment accounts could be pooled funds where the investment manager has custody and possession, and account activity statements are generated only by the manager, and not by an independent third-party. These are the red flags as your investment accounts are not fully visible by the investor, there is a chance the investment numbers could be altered or manipulated.
  • Easy account verification : Investor will be asked to email the personal ID together with a statement of address, where the personal information can be easily accessible by anyone who open the email attachments, Scammer want the personal information so they can steal your identity, telephone contacts so to sell to other parties to obtain loans and credit cards in your name.

Tips to protect from Scam

  1. Do online searches. Type a company or product name into your favorite search engine with words like “review,” “complaint” or “scam.”
  2. Verify credentials. Only work with regulated broker and ask for their license for review. That is the reason why at, we only work with regulated credible brokers as they are constantly monitored by regulatory watchdogs.
  3. Take your time. If the account manager tells you that the offer is for a limited time only, or that investment opportunities are limited, then you have to seriously considered it as legitimate investment will be there tomorrow.
  4. Talk to someone. Before you deposit your money or give personal information, talk to someone you trust. Rethink your decisions and check out the story.
  5. How you pay. Credit cards have significant fraud protection and charge back period of 120 days built in, but some payment methods don’t. Wiring money services  is risky because it’s nearly impossible to get your money back.
  6. Be skeptical about bonus offers. Some companies offer bonus to entice you to sign you and invest. Be wary of the terms and conditions, when you take up bonus, your investment has to trade a certain turnover before money can be withdrawn from the account.
  7. Hang up on robocalls. If you answer the phone and hear a recorded sales pitch, hang up and report it to the authority. These calls are illegal, and often the products are bogus.
  8. Ignore “everyone is winning” story. Don’t believe claims that “everyone” is in on the deal. Be wary of a sales pitch that focuses on how many people are investing, without telling you why the investment is sound.
  9. There is no secret “quick Riches”. Be skeptical of investment pitches that guarantee a certain return or promise spectacular profits. No investment expert can make those kinds of promise as every investment involves risk.
  10. Educate yourself with information. Learn about investing and how to spot the red flags of investment scams so you can protect your hard earning savings.

Download Scam Research Checklist.


Always remember that it’s usually easy to invest in a fraud, but it’s far more difficult to get your money back out. Walk carefully and cautiously by completing your due diligence before ever committing your investment. Educated investors are the front-line defense against investment scams.  By exercising due diligence is your antidote to the manipulative and deceitful sales practices used to commit investment scams.

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