Looking at recent trends it can be seen that there is a considerable increase in the number of tips, complaints, and referrals regarding fraudulent investment schemes. Investors are strongly encouraged by asset recovery specialists to maintain a heightened state of vigilance in order to safeguard themselves and others from falling prey to fraudulent investment schemes.
Looking at recent trends it can be seen that there is a considerable increase in the number of tips, complaints, and referrals regarding fraudulent investment schemes. Investors are strongly encouraged by asset recovery specialists to maintain a heightened state of vigilance in order to safeguard themselves and others from falling prey to fraudulent investment schemes.
Con artists will utilise moments of uncertainty and change to their advantage, like the present COVID-19 epidemic, in order to persuade their victims to invest in fraudulent schemes. The following are some pointers that can assist you in recognising and steering clear of financial scams such as Ponzi schemes, phoney CD scams, fraudulent stock promotions, and community-based financial scams.
Watch Out for Ponzi Schemes
In a fraudulent system known as a Ponzi scheme, the perpetrators take money from new investors to pay off previous investors. What seems like a return on your investment is actually money taken from other investors who have been duped into making the same transaction. Keep an eye out for the following characteristics of a Ponzi scheme:
Returns on Investment That Are Guaranteed to Be Very High
A common indicator of a Ponzi scheme is when investors are given assurances of low or even nonexistent levels of risk while being promised high rates of return on their investments. Each and every investment carries some level of risk, and the potential for significant profits typically comes with a correspondingly high level of risk. If something seems too good to be true, there is a strong chance that it is.
The vast majority of Ponzi schemes involve people or businesses that have not been properly permitted or registered. You need to make sure that a seller is currently registered or licenced by utilising the search tools.
Returns That Are Way Too Consistent
The value of investments has a tendency to be volatile over time. Maintain a healthy degree of scepticism regarding an investment that produces consistent profits regardless of the state of the market.
Avoid Buying Fake CDs at All Costs
When the market is experiencing a period of volatility, investors may be more inclined to look for financial instruments that offer returns at a set rate, such as certificates of deposit (CDs).
Investors are occasionally led to "spoof" websites, which are websites designed to seem exactly like those of reputable financial institutions, by clicking on advertising that appear online. It's possible that these phoney websites are selling counterfeit CDs. The website can utilise names and URLs that seem real, or it might use URL addresses that are similar to those of websites belonging to reputable businesses.
Keep an eye out for the following assertions or remarks on a website that sells CDs; these might help you determine whether or not the website is a spoof:
Providing high rates of interest while without penalising customers for making early withdrawals;
focusing solely on the promotion of compact discs (rather than any other financial items); directing investors to send funds outside of the country or to an account with a name that is different from the stated financial institution; and identifying "clearing partners" that are reportedly registered with the SEC.
Take a moment to familiarise yourself with the following safety precautions before making a purchase of a CD from a website that you discovered via an internet search.
Maintain a Healthy Skepticism of Stock Promotions that Involve COVID-19 Claims
Experts at the Ezchargeback have become aware of promotions claiming that publicly traded companies are poised to profit from the current pandemic because, for example, the companies are developing products or services that can prevent, detect, or cure COVID-19, and that the stock of these companies will dramatically increase in value as a result of the pandemic.
This information has been brought to our attention. Promoters of a particular stock could advertise it through unwanted phone calls, unsolicited email messages, or spam on social media platforms like Facebook and Twitter.
Be wary of promises made by companies, particularly those involving microcap stocks, claiming their products or services can assist in the prevention of the COVID-19 virus. It's possible that these assertions are being made as part of a fraudulent "pump-and-dump" campaign.
If you invest in a firm that makes statements that are false or untrustworthy, it is possible that you could incur severe financial losses, and if trading in the company is halted, it is also possible that you will be unable to sell your shares.
Be on the Lookout for Financial Cons Based on the Community
Criminals who commit fraud will sometimes take advantage of the high levels of trust and friendship that exist within a community in order to prey on its members.
These groups may include people who share commonalities in terms of their ethnicity, nationality, religion, sexual orientation, military service, or age. The term for this type of fraud is "affinity fraud."
Criminals that commit fraud could actually belong to the victims they defraud, or they might only pretend to. They may recruit the help of group leaders to disseminate information on the strategy. These leaders might not understand that the "investment" is essentially a scam, which means that they, too, might end up being taken advantage of.
Use the free and simple search tools online to examine the background of the person selling you an investment, including the person's licence and registration status. This is important to do even if you have anything in common with the person selling you the investment.
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