We’ve talked a lot about investment scams in the past. Fraudsters are always finding new ways to take advantage of unwitting investors. However, there are several top investment scams that fraudsters favor and which serve as the basis for many new types of investment fraud.
Investors should recognize most of these, but being able to spot signs of these top investment scams may help you in assessing new potential investment risks or signs of fraud.
Pyramid/PONZI Scheme
Now, this one should be familiar to everyone. Pyramid schemes, also called Ponzi schemes may be the most popular form of investment fraud. Pyramid schemes are perpetuated by duping investors into selling the same product or service to mostly friends and family.
Promissory Notes
Promissory notes are a type of debt-investment. In turn for an investor’s loan to a company/party, the investor is paid back a fixed return on the original amount from the company/party. Though it can be a good, legitimate investment option, many people fall victim to risks that are too low and returns that are too high.
Currency Trading
Trading currencies is an exotic and appealing form of investment. Due to it’s complex nature though, it can be a huge potential investment risk
Precious Metals
Like trading currencies, investing in precious metal can be appealing, but investors should be wary of the risks. It is not easy for investors to guarantee reserve amounts of precious metals they have invested in. This makes it easy for scammers to set up fraudulent investment schemes.
Unregistered Securities
Don’t be fooled by how good a potential investment appears. Investment scams happen most often because the provided documents and correspondence outlining the investment looks real enough. Don’t settle for looks, make sure to thoroughly vet your investments.
Though these represent popular top investment scams, fraudsters are always coming up with new methods for cheating investors. Make sure you properly discuss any new investments with a trusted broker and your bank before committing any finances.
The Securities and Exchange Commission offers a variety of tools and resources for investors
If you feel you are the victim of an investment scam, contact Savage Villoch Law today and we will assess your situation.