The Basics of Investment Scams
An investment imposter scam is when someone tries to convince you to invest in a company or opportunity that doesn’t exist. They may promise high returns or tell you that the investment is low risk. The scammer will often create fake documents, websites and social media profiles to make their company look real. They may also use the names of well-known companies or celebrities to make you think their investment is legitimate.
If you’re thinking about investing in an opportunity, do your research first. Make sure you understand the risks involved. Be especially careful if you’re asked to pay upfront for an investment or if the investment guarantee sounds too good to be true. Remember, if it sounds too good to be true, it probably is.
3 Common Tactics Used by an Imposter Scammer
Imposter scams come in many different forms, but there are some common elements that they all share. One of the most important things to remember is that if something sounds too good to be true, it probably is. Here are some common tactics to watch out for:
- Phantom Riches: This is when scammers promise a huge return on investments that are simply too good to be true. They may claim to have inside information or special access to high-yield investments, but in reality they are just trying to steal your money.
- Source Credibility: Always be wary of anyone who claims to be an expert on investing, especially if they are not well-known or respected in the industry. Be sure to do your own research and never take someone’s word for it without verifying their credentials first.
- Social Consensus: This is a classic con artist tactic where the scammer tries to create a false sense of social proof by claiming that everyone is doing it or that you’ll be missing out if you don’t invest now. Be very skeptical of anyone who is trying to pressure you into making an investment decision.
- Reciprocity: This is another common tactic where scammers try to make you feel obligated to invest by claiming that they have already done so or that they will match your investment. Again, be very skeptical of anyone who is trying to pressure you into making an investment decision.