Skip to content

How Do You Detect Investment Fraud?

Investment, a word which make a lot of people think to have more money and is the way to have more money and gain some income.

However, a lot of people have not been successful in their investment especially during depressing environment, be it business, economic, health whatever, and a lot of people in their desperation, try all sorts of investment methods and ways just try to make money or recoup whatever is lost.

And this is the time, crooks and scammers thrive on human greed and take full advantage of the vulnerability of human and further make the investors lost more instead of recouping their losses.

According to Federal Trade Commission in its report stated that in 2020, they received more than 2.2 million reports about fraud and about $3.3 billion was lost, you can read more about this in here.

The problem is a lot of people think it will not happen to us, just like a lot of people think they will not be infected with COVID-19 virus even though they do not take the basic precaution like wearing masks or wash hands often. If we have this assumption and lay down our guard or get greedy with some money making opportunity, we may regret our action later.

The crooks and scammers are much more sophisticated, with their intelligence, just wonder why don't they put their skills to good use, maybe they find it easier to scam and con people and make a lot of money.

So what are the usual or the latest tricks these scammers employed?

1. Too good to be true investment platform

A lot of times, some platforms claim they can generate return on investment way above the norm, and some investors tend to believe this lucrative returns and decide to invest and later find out it is just another Ponzi Scheme in operation.

Most of the time, investors do not bother to carry out some due diligence and find out more about the platform before investing.

2. You are approached to invest in certain investment plan.

When someone approach you and tell you he has a fantastic investment scheme whereby if you invest, you are able to make a lot of money, this is actually a red flag for you to raise doubt about this too good to be true investment plan, sadly, a lot of people decide not to take more action to find out more about the scheme.

3. Use of the latest technology

Most people think with videos shown in the website about certain product or investment plan and video testimonies from supposedly successful investors who reap huge and handsome returns, so people think this investment product is genuine and can be trusted, without knowing the crooks have created the videos just to impress people and if one bother to check and do more research, they will find out similar videos have been shown in other investment plan too.

4, The Truth Secret of the Successful Investment Plan

If a marketer wants you to invest in the product he is promoting, and claimed that his method and technology is more advance and easier to make profit, do you believe in him and jump in and give him money to invest for you?

Did you ask him what is his secret and how his method is so successful, and whether he can show some proof to substantiate his claim? if he refuses to show you some concrete evidence of using his method or technology, you can reap handsome profit in investment, you need to raise red flag and be alarm of possible fraud and scam

5. The Most Vulnerable Group

Which is the most vulnerable group for investment fraud? the group which is more prone to financial fraud is the retiree group with huge sum of money for one lump sum distribution,

We need to educate those retirees of handing over money to someone who claim can help them to grow their money, fraudsters are good at evoking emotion especially among the older retirees to hand over their money in dubious decision-making.

6. Is there a thing called Secret Formula in investment?

if someone approach you to invest with him as he has invented a secret formula in investment and sure make money. Before you jump into the opportunity, do ask him to show some hard evidence his secret formula has generated huge profit for him, the best is to ask him to show his trading records and bank accounts showing he has made so much money using his so called secret formula.

If he fails or not willing to do so, then it will be advisable for you to walk away from him.

7. Awareness of possible fraud.

The moment we accept the fact that we all are at risk to fraud, be financial, or otherwise, then we can safely say we are at least at a certain level of awareness.

There are people who believe they are not vulnerable to frauds and these are the people who most likely fall into the trap as they are not going to take necessary steps to protect themselves and be aware and alert of fraud.

Fraud case happen now and then and it is more severe and rampant during crisis or disasters, for example like the current COVID-19 Pandemic which has affect people from all walks of life, with people losing jobs and businesses badly affected and forced to close, and people in general are eager to generate income in order to ease the financial strain, these are the conditions which give the fraudsters great opportunities to strike.

8. Have some knowledge especially financial knowledge to be aware of fraud

Nothing beat having the knowledge and able to identify possible fraud, as mentioned by one expert, she said “Prior knowledge about fraud, even generally, is particularly helpful in avoiding victimization,” , you can learn more about what she said in HERE. 

If you have any comments and feedback, do give your opinion in the comments below.

Please follow and like us:

Leave a Reply

Your email address will not be published. Required fields are marked *