Investment scams prey on your desire to grow your bank account by investing your money. Except instead padding your own bank account, you unwittingly help a scammer grow theirs. Whether it’s offering “unprecedented access to industry insiders” or “funds needed for a revolutionary idea,” investment scams are quite common, but can be tricky to spot.
How does an investment scam work?
Like other common scams, investment scams will often promise something that sounds “too good to be true.” These scams can span all markets, including real estate, cryptocurrency, businesses to invest in, and even collectors’ items like coins. These scammers will promise a “once in a lifetime opportunity” and try to use pressure tactics to get your money.
How do I spot an investment scam?
Because scammers know they must appear legitimate to rope in victims, investment scams can be difficult to spot. Scammers will sometimes lay the groundwork for scams over time, appearing to be a new friend or professional contact and attempt to develop a relationship before ever offering their phony investment opportunity.
Even if you’ve been talking to someone online or in person for long enough that you feel like you can trust them, if you’re ever asked for extremely sensitive information like your social security number, bank account number or routing number, or your passwords, it’s almost certainly a scam. Additionally, anyone who tries to get your money in the form of a gift card or claims they can only deal in cryptocurrency should also be cause for concern.
Investment scammers will also use pressure tactics to try and scare you into giving them your money and information before you have a chance to research the company. Investment scammers may also use a secondary tactic of posing as your bank or legitimate existing investment firm telling you your money must be moved due to a vague security issue.
How do I avoid falling for an investment scam?
Always do your homework. If an investment opportunity sounds too good to be true, it probably is. If the person offering you an investment opportunity is someone you just met or someone you’ve only interacted with online, you should be wary of handing over your money. If you’re ever asked to give someone your personal information, even under the guise of some kind of crisis or emergency, that’s another red flag.
How do I get my money back and protect my information?
If you paid a scammer with a wire transfer, credit or debit card, peer-to-peer payment app like Venmo, or cryptocurrency, contact your bank immediately. If you paid with a gift card, contact the company you purchased the gift card from.
