Investing can be very exciting, but it can also be very risky. Unless you know what you’re doing, you could end up losing a lot of money. Unfortunately, there are some investment scams that target investors who have already lost money in a risky investment. These scams use impersonation, offshore operations, and promises of unreasonably high returns to lure investors in.
Boost the price of stock
Boost the price of stock investment scams are not new. They often start with a simple cold call, but that’s not the only way they’re perpetrated. Scammers will also use email, social networking, forums, and a host of other methods to get their foot in the door. They then try to dupe you into investing in a new company or investing in a new product or service.
Boost the price of stock investment scams also come in various sizes. Small cap stocks are often more susceptible to scams than their larger counterparts. However, this doesn’t mean they’re not worth investing in. Small caps also don’t require large numbers of new buyers to push the price up.
Promise unreasonably high returns
Investing is never a sure thing, and a lot of people lose money to investment scams. Scammers promise unreasonably high returns with little or no risk. Often, scams involve unsolicited approaches or pressure to make decisions quickly.
Some investment scams can be very difficult to spot. They may lurk in phone calls, emails, social media accounts, or even websites. But no matter where you find them, you should take the time to learn about the risks and make sure they are legitimate.
Scams may promise that you will make thousands of dollars a day. They may tell you that they have been approved by real government regulators. They may also offer bonuses for recruiting friends.
Lure you in with promises of making a lot of money
Using a combination of traditional and social media, scammers will send you an array of emails. They’ll ask for your personal information, presumably to scam you out of your money. They’ll also ask you to buy their goods – presumably to bilk you out of more of yours. They’ll even send you some very nice looking merchandise. These schemes have become more sophisticated over the years, with scammers now using social networking sites and mobile apps to find and prey on unwary consumers.
Among the many scams out there, one that stands out is the Nigerian letter scam. This con game entails sending you an email informing you of a great investment opportunity, only to disappear with your hard earned cash. To make matters worse, the email is not from a real person, but rather a crook from Nigeria. This particular scam has cost Americans an estimated $703,000 over the past year, according to the Better Business Bureau.
Impersonate legitimate brokers or investment advisers
Using social media, criminals impersonate legitimate brokers or investment advisers in an attempt to defraud investors. Some scam artists even use fake websites that mimic the firm’s real website.
These imposter schemes attempt to lure potential investors into paying cash for investment services. They may also claim to be able to retrieve money from an investor through SEC enforcement action or a class-action lawsuit. They may also use technology to appear as if they are calling from the firm’s location.
These scams can be hard to spot. The best thing to do is trust your instincts and seek professional advice. If you feel that you have been scammed, file a complaint with the Securities Division of the US Securities and Exchange Commission.
Offshore operations make it harder for regulators to shut down the scam
Using an offshore account to bank your 401k is the last thing you want to do. Besides, the tax benefits of doing business offshore can be significant. The perks include favorable tax treatment and increased privacy and control. The downside is high fees, limited choice of financial institutions and limited access to your funds. If you plan to open an account with a foreign financial institution, make sure you do your homework before you sign on the dotted line.
Offshore investments are usually the domain of the well heeled. These include high net worth individuals, corporate executives and affluent families. However, these people aren’t the only ones who can take advantage of the offshore tax code.