Managing personal cash flow and accumulating wealth are priorities for most people, regardless of income levels and investment holdings. We simply want to make the most of our money, building security and resources to hedge against life’s unexpected turns. Unfortunately, opportunistic scammers are willing to exploit our best intentions for their own ill-gotten gains. Investment scams are widespread and take many forms, so a vigilant approach is the only assurance against becoming a victim.

Investment scams present themselves as opportunities to invest in shares, real property, and rare items, in some cases. In order to mislead investors, the scams are constructed to appear legitimate, with all the correct support in place to lure even the most financially savvy individuals. Many scams share common hallmarks, however, so hope is not lost for vulnerable investors acting in good faith.

Things to Watch For

Regardless of the specifics, investments schemes commonly share promises of low-risk and high returns. Naturally, investors are attracted to better-than-average returns, especially when their holdings are not in jeopardy. Your first level of scrutiny vetting an investment opportunity is assessing its general believability. As a rule, if returns sound too promising to be legitimate, a particular investment offer probably warrants a closer look.

Solicitations from unknown sources, for example, should be viewed as suspect until sources have been verified and legitimized. If you are uncomfortable with terms and conditions, or even with the very nature of a sales pitch, shut it down immediately. Cold calls and other unsolicited overtures are like scammers knocking on your door. The safest way to close the door on illegitimate scams is to hang up or delete emails from parties you don’t know.

It’s important to note some callers will pretend to know you, by referencing materials they may have sent previously or sharing inside details about your life. In one recently publicized scheme, scam artists posed as representatives from the European Patent Office.
Limited-time offers raise red flags as well, putting pressure on investors to act quickly. While timeliness plays a role in successful investing, scams that require immediate deposits or purchases should tip-off investors to problems with the veracity of investment claims.

Avoiding Missteps

Common sense protects against poor investment decisions, but it isn’t always easy to see a scam coming. When in doubt, always seek professional guidance when selecting investments. When a particular firm or individual extends an opportunity, it is important to consult with experts unrelated to the deal on the table. In fact, pursuing your own investment strategies, rather than taking-up with those who approach you, is generally the best approach.

If you feel as though you are being targeted as a victim of financial crime, report your concerns to local authorities. Staying informed about fraud trends also helps you recognize shady propositions, so tracking consumer and security news is helpful. A recent study carried out on behalf of FFA UK, for instance, points to a sharp rise in the number of telephone scams unfolding in the region.

Investments scams are cleverly disguised as legitimate opportunities, so staying safe against opportunistic threats requires diligence and education. Let common sense be your guide, taking care to investigate any investment angles you are not completely comfortable with. And when irregularities do arise, consult with professional investment advisors and financial officials to thoroughly scrutinize suspicious operations.