Investment Scams

Read time: 2 minutes 15 seconds

One day you get an email or message or pop-up ad, inviting you to a once-in-a-lifetime investment opportunity: "invest today, guaranteed to triple your money. Hurry! Offer expires in 24 hours!"

Investment scams are the biggest category by amount. In the US and UK alone, over $5.3 billion was scammed from victims last year. Let's understand the difference between an investment scam and a bad investment. Any investment can lose money. But in an investment scam, your money is never invested at all. The scammer simply steals your money.

We could study hundreds of different investment scams and learn specifically how to avoid each one. Yet it's far easier to simply remember the three early warning signs of a scam:

1. You're in dialogue ...

2. ... which you did not start ...

3. ... and the topic turns to money (or anything valuable) …

It's a scam!

Let's take a closer look at investment scams.

1. You're in a dialogue ...

Scammers know you wouldn't trust any old Joe with your hard-earned cash. They pretend to be financial experts with years of experience who are ready to help you multiply your wealth.

2. ... which you did not start ...

The scammer starts the dialogue by making you an offer to invest your money, when they actually intend to pocket it.

3. ... and the topic turns to money (or anything valuable) …

The topic of money is immediately brought up. The scammer creates a false scenario where you believe that discussing your finances with a stranger - out of nowhere - is normal.

It's a scam!

Investment scams often have additional tells:

A- Pressure tactics urge you to act quickly, without thinking. For example "this offer is available today only." Or "we can accept only one more investor."

... (A real investment firm encourages you to do thorough research and take your time.)

B- The verbal promise of unrealistically high returns at negligible risk.

... (A real investment firm gives you truthful and in-depth written disclosures about the risk and reward.)

C- The alleged investment firm is not really a licensed company.

... (Governments publish lists of approved investment firms, for example in the USA: https://brokercheck.finra.org/ )

D- Require you to send money via a non-refundable, non-traceable method (i.e. wire transfer, cash, gift cards, crypto or cash transfer apps).

It's not always money! Sometimes scammers go after your personal info - which can be even more valuable than money. Be careful when sending money or personal info to a stranger.

There are a lot of scammers nowadays. Let's make their lives more difficult and less profitable, by recognizing the early warning signs of a scam. 

1. You're in dialogue ...

2. ... which you did not start ...

3. ... and the topic turns to money (or anything valuable) …

It's a scam!

"Get rich quick" investment scams are as old as time. People have been scammed out of their hard-earned money since the feudal ages. Learning to avoid these scams is just as important now as it was then.

Don't get scammed! Get a second opinion: fast, secure, easy, confidential, free! Contact ScamAvoid on (we're everywhere: Facebook, X (formerly Twitter), Instagram, TikTok, ScamAvoid.com, email, etc.)