Published On: Mon, Dec 11th, 2017

What Are the Top Common Investment Scams You Must Be Aware of?

More often than not, investment scams encourage you to invest money for a doubtful venture. Worse, they entice you to a non-existing investment. If you want to avoid being one of the victims, be sure to familiarize yourself with these common investment scams:

photo/ Pete Linforth via pixabay


  • Forex Scam


In case you weren’t aware, the forex exchange market is long-known to be the biggest and the most liquid financial market not just locally but globally. Normally, investors purchase and sell currencies because they want to earn money from the changes in the exchange rates. However, trading in foreign currencies is not easy as it seems. It is too risky.

Most forex ads advertise quick access to foreign exchange market, either through software or a course. However, foreign exchange trading is being conquered by huge international banks. They all have excellent staffs, state-of-the-art technology, and trading accounts. Thus, it’s hard to beat these pros consistently.

In some ways, forex trading schemes may be fraudulent or illegal. Many of these services are operated from another place. In fact, unregulated firms could be promoting their services without following the law.  Therefore, your money may not be capitalized as declared.


  • Advance Fee Scheme


The main targets here are investors who previously lost their money from a precarious investment. Scammers will contact these investors and then offer a hand in recovering what they lose from the previous investment. They will either entice the victim by saying they’ll exchange or buy the investment at a huge profit. However, the thing here is investors should pay them a refundable tax, fee, or deposit. Once the investors pay, the scammer will take them right away and run away.  


  • Offshore Investing Scam


As what the name suggests, this fraud assures a large amount of profit in one condition. You need to send your hard-earned money offshore abroad. The objective is to reduce the amount of taxes. Stay alert when it comes to tax avoidance schemes. You may end up having debts from the government due to penalties, interests, and taxes.  


  • Pyramid or Ponzi Scheme


Pyramid schemes are one of the most terrible scams on this list. These are MML in disguise. The truth about them is that they are trying to build a pyramid scheme by convincing people to be a member.  They will only take the benefit of you and you’ll find out that they are to be avoided.

Similar to Multilevel marketing, this fraudulent scheme aims to recruit members to take an active part in selling products and services. Additionally, they claim to be offering a business opportunity by means of signing up more members and fulfill a certain level of accomplishment.


  • Exempt Securities Scam


If you’re going to analyze it, exempt securities are not a scam at all. However, some scammers call illegal investment as exempt securities. Always be careful in receiving unsolicited phone calls that concern a hot tip on promising companies. To make sure, call your local securities regulator or your investment fraud lawyer.

Final Thoughts

Through raising your awareness against these schemes, you can protect your hard-earned financial resources from losing.  

Author: Pankaj Deb

On the DISPATCH: Headlines  Local  Opinion

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