The Most Common Investment Scams and How to Avoid Them

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The Most Common Investment Scams and How to Avoid Them | FutureBusiness

Crypto Scams: What are they?

Cryptocurrency is an entirely digital currency, which is verified and has records maintained by a decentralised system, unfortunately as much as it has attracted positive results and engagement, it has also attracted scammers.

There are a number of different scams to be wary of, with scammers impersonating businesses or individuals, and offering to do business using cryptocurrency only – and often they will ask investors to sign up to a website or provide payment with details to follow, and these lead to money being transferred across as crypto – and the scammers simply disappearing.

How do Crypto Scams Work?

It is important to remain alert when dealing with cryptocurrency – you should always secure your ‘keys’ for your currency wallet, and never share sensitive information with third parties.

When preparing to invest, do the work first – make sure the investment opportunity is legitimate, from a trusted source, and the contact isn’t asking for information they have no business knowing.

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IPO scams: What are they?

Also known as ‘Pre-IPO investment scams’ these generally involve offering the buying of unregistered shares in a private company, before the initial securities or public offerings (as a normal pre-IPO opportunity), but the selling is for a non-existent company, or a listing for a company that hasn’t gone (or never will go) public.

How to Identify an IPO Scam?

Research is essential – it may be difficult, especially if you are trying to obtain share opportunities that aren’t widely known about, however investigation with a trusted partner should be conducted.

The SEC Office of Investor Education and Advocacy has warned that many scams purport to offer investors opportunities in social media and technology companies (such as Facebook and Twitter) and many of these types of fraud are promoted on social media, internet sites, by telephone, email, or in person.

This is not an exhaustive list of the most common investment scams that you might come across as you look at investment opportunities, and it is vital that you don’t just rush into an agreement without seeking professional advice from a registered, licensed, and trusted service who can ensure that you are actually going to see a return on your investment that doesn’t amount to nothing!

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