Protect Yourself from Fraud

Many fall victim to fraud each year. However, one of the best ways to protect your hard-earned money, is staying informed. The first step of staying informed is being able to point out what might be a scam. Here are a few types of fraud and how they work.

Ponzi and Pyramid Schemes

These types of investment scams take money from one to pay another. Scammers will use the money from new investors to pay the initial investors. Once the flow of new investors comes to a halt, the initial investors lose their money.

Oil and Gas Scams

Investing in oil or gas can be a legitimate investment. However, scammers will take advantage and mask their scams with what seems to be legitimacy. Phone salespeople will pressure you to invest and over-emphasize the profitability of the investment.

Internet Fraud

Internet fraud is much like fraud that is sent by mail or phone calls. They use online tools, such as newsletters, spam emails, and social media. They have the resources available to create a legitimate looking website that seems convincing enough to draw you in.

Take the time to ask questions and do your own in-depth research, prior to investing. Speak to friends and family and ask for advice. Understand what you are investing in, the risk of investing, and the company’s history.  Before purchasing stock, you want to understand the company that you are investing in. Research the company and pull information from reputable sources.

What to look out for:

• Guarantees of high returns on your investment
• Unsolicited offers
• An offer that seems too good to be true
• The pressure to invest now

Whether it’s guilting you into investing, instilling fear in you, or giving you the impression that they are professionals, con artists know exactly how to persuade you. Don’t rush yourself and don’t allow others to rush you. Take your time when making investment decisions, remain skeptical of unsolicited offers or offers that seem like they are too good to be true, and be sure that your money is always accessible.

If you’re interested in hearing real stories about scam artists, here’s a great collection of podcasts from the New York Times

https://www.nytimes.com/2021/02/16/arts/podcasts-scams-pyramid-schemes.html