That growing stock you've just invested in could send you crashing into a world of debt!

When things get rough and financial stocks become volatile, the market is essentially wide open for investment scams.  Numerous con artists are on the prowl, seemingly coming out of nowhere to thieve riches from distraught investors looking to recoup their lost funds.  They come advertising many ways to beat the system, promising high returns that come included with minimal to no risks. Some of the more experienced may pick up on this and stay away.  Those who are interested enough to listen may easily become victims unless extreme caution is practiced.

Exhibiting caution in all investment decisions

To elude these types of scams, an investor should proceed slowly and weigh all of their options before making a commitment to any investment move.  These scams typically involve a substantial amount of money so it is very critical to choose wisely.  You can also learn a firm's legitimacy by inquiring with state regulators.  Though often overlooked, using a bit of common sense can help you determine if something sounds too good to be true. 

Con artists conducting investment scams make a good living by persuading consumers out of their hard earned money.  These individuals have chosen this as their profession and many have the practice of investment scams down to a science.  They are often well spoken, trained and take immense pleasure in fooling anyone who is unfortunate enough to fall into their trap.  They are able to hide their true intentions by using tools such as the telephone and the World Wide Web.  A fast talking scammer who has decent knowledge of the field can talk money out of the tightest marks.  At the same time, a polished website can make a fraudulent firm appear more genuine than an actual business, leaving an investor exposed to financial scams and other security threats. 

Prevalent investment scams

Below we have listed a few of the most popular approaches to investment fraud:

1. Unlicensed brokers selling securities 

2.  Analyst research

3.  Promissory notes from corporations 

4.  Debt notes from prime institutions

5.    Illegitimate viatical settlements 

6.  Affinity schemes

7.  Gift annuities 

8.   Gas and oil schemes

9.  Leasing schemes


How the artists scam your money

The most common ways investment scams are conducted:  

1.  Online schemes 

2.  Deceptive sales pitches

3.  Phony investment seminars 

4.  Telemarketing schemes 

5.  Pyramid schemes

6.  Entertainment-based investments 

7.  Churning

8.  Unauthorized trading 

9.  High pressure selling

10.  Illegal sales 

11. Spam emails

12. Phishing schemes

 

Avoiding Investment Scams

While falling into this trap can prove detrimental, there are many ways to protect yourself against investment scams.  The easiest tip is to just say "No!"  There is no harm in telling someone that you're simply not interested at the time.  Let them know that should you develop an interest, you will contact them for further details.  Also keep in mind that many legitimate firms and brokers are waiting for your business, not seeking it by attempting to pressure you via email.  Formulating an exit strategy before hand makes it much easier to end the communication even when the pressure becomes intense.

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