Investment Fraud Signs That You Should Always Be Wary Of
It’s a dream we’ve all had — to get rich, to become financially independent and to know that we’re set for life. It’s so easy to get blinded by the dream that we lose sight of what’s truly necessary to get to that dream: working hard and working smart. Then throw in the challenges you have to overcome daily, and you’ve got a fight on your hands.
And much like the antagonists in almost every tale we’ve grown up with, when they can’t beat you outright, they’ll try to deceive you. And that’s exactly what investment scammers do. They try to take advantage of your desire to make money fast in order to take what you have from you.
And well, a lot of times, it’s not really about losing the money that truly hurts, it’s the fact that someone got away with deceiving you. Well, we’re here to help you detect the wolves in sheep’s clothing. So, what are the signs that you should keep a keen eye out for?
Low Risk, High Return Proposal
One of the basic binding principles of investment comes in the form of the risk-return relationship. This principle suggests that there is a direct relationship between risk and return. So, your potential monetary returns scale along with the risk that you could also lose that much money. It’s just the way things are, really.
Which is why it’s going to sound like it’s too good to be true when someone suggests that investing in a particular item has a high reward and low risk. As mentioned earlier, risk should scale with returns. Do not let greed blind you to logic.
Special Connections
Almost every scammer is going to try to get their victims to think that they’re guaranteed to win. And one of the most common ways to do so is to claim that they have special connections and insider information on the “winning numbers”. And the horror here is that this often gets victims to become much bolder in staking their money, so they invest even more. Besides, if the information being given to you is about a private company, then you could be held liable if you decide to use this information to the detriment to the company. And when that does happen, it’s best to consult an expert like Jeffrey Erez, investment fraud attorney to help you.
Lack of Registration Documents
One of the most important things you should always look for if you want to determine authenticity, are the documents that represent a person’s background and whether or not they’re trustworthy. Anyone who intends to sell securities or to provide investment advice has to be registered with their local securities regulator.
Intense Pressure to Buy
When you’re forced to take action without being given time to think it through thoroughly, you should already be wary of whoever you’re dealing with. High-pressure sales tactics (like limited time offers) are a common tool that scammers use because it nets them quick and easy results and it allows them to simply move on to the next victim. So, as much as possible, be aware when you’re being forced into a quick decision.
Author: Mahendra