Five Investment Scams Investors Need to Beware Of

Five Investment Scams Investors Need to Beware Of
  • Opening Intro -

    Working with a scam artist can hurt your business as an investor.

    Therefore, it is important to know what looks like a scam and how to protect yourself from scams at all time.


Scam artists are in the business of tricking you; counting on you that you will not make a background check on them. Not only will you lose your capital, but being involved in a scam investment can also land you in jail. This will be a setback to your business. Everything you have been working for will crumble because of one single mistake.

Asking for information from referees and former clients is not reliable enough. You must do your research on an investment you are about to make by hiring a team of experts to analyze the project for you before making any investment.

The following are the five investment frauds you should be alert of

1. Unlicensed agents and advisors

These are mostly offline scam artists; they come in different tags, sales agents, financial agents and all sorts of names. As an investor, you should know how to differentiate between such fraudsters and the legitimate ones. Before you get into a deal with them, complete a thorough background check using investment and governmental agencies.

2. Internet investment schemes

Many people have lost their money for falling for online scam artists. They create websites within minutes that can look legitimate and agency approved. Some act as licensed stockbrokers or legal advisors. It is hard to catch such people because they will just pull down the web and pop up another one under a different identity. Again, you need to check the legitimacy before conducting any business with these online business fronts.

3. Offshore investments

Scam artists know that once money leaves your country, it is not easy to follow. They take this advantage to create an investment scam. They might be offering shipping services or promising to deliver goods to you at a lower price.

4. Micro-cap stock market

Also known as the penny stock, they are small shares of public companies that trade at low prices. Investors dream of buying the shares at start up and sell them when the company grows. Due to lack of information, scam artists use the micro-cap stock to defraud investors of their money.

5. Affinity groups

Due to our human nature, we find ourselves trusting people who are like us. Affinity group will use this mistaken trust to exploit people of certain religion, ethnic groups, or even sexuality. The trick to making people invest is making them believe it will benefit them in a certain way.

So many people have lost their money through the above scams. Be smart and don’t be a victim. You can share the information on social media to create awareness to your family members and friends so that they will not be victims too. No one wants people around them in financial strains.


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