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How to Protect Yourself From Investment Scams
What is an Investment Scam?
An investment scam is a fraudulent scheme that promises high returns on investment with little or no risk. These scams often target seniors and those who are new to investing.
How to Spot an Investment Scam
There are several red flags that can help you spot an investment scam:
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Promises of high returns with little or no risk: No investment is completely risk-free. If someone promises you a high return with no risk, it's likely a scam.
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Unlicensed or unregistered sellers: Investment professionals must be licensed and registered with the appropriate regulatory body. If someone is selling you an investment without a license, it's likely a scam.
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Pressure to invest quickly: Legitimate investment professionals will give you time to do your research and make a decision. If someone is pressuring you to invest quickly, it's likely a scam.
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Complex or unfamiliar investments: If you don't understand how an investment works, it's best to avoid it. Scammers often use complex or unfamiliar investments to confuse investors.
How to Protect Yourself From Investment Scams
There are several steps you can take to protect yourself from investment scams:
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Do your research: Before investing in anything, take the time to do your research. Learn about the investment, the company behind it, and the person selling it to you.
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Get a second opinion: Before making a decision, talk to a trusted financial advisor or family member to get their opinion on the investment.
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Never invest more than you can afford to lose: Only invest money that you can afford to lose. This will help you avoid losing your life savings if the investment turns out to be a scam.
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Report scams to the authorities: If you suspect that you have been the victim of an investment scam, report it to the authorities immediately.
If You Have Been Scammed
If you have been scammed, there are several steps you can take to protect yourself and get your money back:
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Contact your local law enforcement agency: File a police report and provide them with as much information as possible about the scam.
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Contact the Securities and Exchange Commission (SEC): The SEC is responsible for regulating the securities industry. They can investigate investment scams and take action against scammers.
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File a complaint with the Federal Trade Commission (FTC): The FTC can investigate investment scams and take action against scammers.
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Get help from a victim assistance organization: There are several organizations that can provide support and assistance to victims of investment scams.