Scams and Frauds

How to Spot Scam?

The investment offer might come from someone you know, someone you are related to – or it might just be an offer you get out of the blue, by phone, in an email, or from an online advertisement. The investment will usually be tempting but of course very risky. Unsolicited investment offers are intended to catch your attention and look like an investment you should seriously consider. So what are the warning signs?

Warning Signs

Investment scams can take many forms – and they will be really tempting. No matter how attractive the investment, scammers use specific tactics to get you hooked. Be cautious and think twice if you hear any of these phrases:

  • Your profit is guaranteed
  • It’s an amazingly high rate of return
  • There is no risk
  • This offer is only available today
  • It’s a secret investment tip just for you
  • Just write your cheque now, I will do the paperwork for you later

These phrases are the tricks of the scammers. It is their business to convince you to invest. These phrases help them do it. If you hear any phrases like these, or feel pressured to invest, STOP immediately. Instead, take the following steps:

Ask questions

Fraudsters are counting on you not to investigate before you invest.  Ask as many questions to understand the offer. It is not just enough to ask for more information or for references.

Research before you invest

Understand a company’s business and its products or services before investing. Ask for the company’s financial statements. Check if the company is registered.

Know the salesperson

You are encouraged to thoroughly evaluate the background of any salesperson with whom you intend to do business – before you hand over your hard-earned cash. Check if the salesperson is registered. If not, check if the company the salesperson is attached to is registered.

Be wary of unsolicited offers

Be careful if you receive an unsolicited offer to invest in a company, or see it praised online, but cannot find any financial information about it from independent sources. It could be a scam.

Protect yourself online

Online and social marketing sites offer a wealth of opportunity for fraudsters. Protect yourself and research thoroughly before you invest.