Investment scams are becoming more and more frequent due to the amount of money these scammers can coax out of you. It’s not unusual to see messages showing “investments” that promise high rates of return with little or no risk. Many versions of these scams claim to seek investors to help form a new company or bank. Others are vague about the nature of the investment, but they catch our attention with the unbelievably high rate of returns or percentage of equity. Promoters boast about their high-level financial connections, the fact that they’re privy to inside information, and that they’ll guarantee the investment or that they’ll buy it back. To close the deal, they often serve up bogus statistics, misrepresent the significance of a current event, or stress the unique quality of their offer. Most of the time, they will try to rush you into the investment or pressure you with countless emails and phone calls.

The Catch:

Many schemes you hear about are a good investment for the promoters, but surely not for the investor. Promoters of fraudulent investments operate a particular scam for a short time, close up shop and spend their earnings before they can be detected. They often set up shop with a different alias, selling another investment scam.

What to do when you receive an investment scam:

Take your time to evaluate the legitimacy of any investment offer you receive. A higher return obviously translates into a higher risk. In the business world, there is no reward without taking some sort of risk. Don’t let a promoter pressure you into committing to an investment before you haven’t done your homework. If you need a little help, hire your own attorney or an accountant to take a look at any investment offer.

Report Investment Scams

If you believe you’ve responded to an online scam, file a complaint with:

  1. The Federal Trade Commission
  2. The FBI’s Internet Crime Complaint Center
  3. Your state Attorney General