Avoiding Investment Scams

While it would be nice to think that you can trust anyone you talk to in the world, the days when people can be trusted by their word are long gone. These days you need to enter into any financial deal carefully to make sure you are not taken advantage of.

Many of the scam artists out there sound like they are legit, know the terminology and may even seem to know a bit about your financial situation. For most people, getting that kind of information given to them will make them trust the person at the other end of the conversation. As soon as they trust that person enough to give out more of their personal information, their identity – and money – is on the line.

Be suspicious if they call you

You should always be reluctant if someone calls you and wants you to give out your personal information. Once the phone rings and someone identifies themselves as being from a company representing your interests, you should always be on guard. You should look at your caller ID to see where the call is coming from. Ask for their return calling information. Tell them you are busy and will have to call them back. Most scam artists are not a fan of letting you know how to get a hold of them and may want to avoid allowing this. This should make you suspicious of who they really are.

If they do give you return calling information, look it up to verify it. Check online to see if the number and the caller’s claims match up. If they claim they are from your bank or another financial institution, call that bank or institution and ask if the person who called you is their employee. While it may feel like you are being paranoid when checking out the caller, remember, if you are wrong and give your information to a less than honest person you could end up spending months or even years trying to reclaim your identity.

Take your time

A lot of investment scams revolve around making the need to get in on the investment sound immediate. Many of the ways these scams work is to make you think that if you don’t get in on the deal right away it will be too late or there won’t be room for you in this great once-in-a-lifetime opportunity. Don’t let the rush treatment work on you. Ask for information to look into the investment option and let the caller know you want something to study before you make any decisions. Many scammers expect this and will try to badger you into going along with their plan by asking if you aren't capable of making your own financial decisions or making you feel insignificant. Don’t let that tactic work.

You have the responsibility to yourself to make sound investment decisions. Any legitimate investment opportunity should let you see what you are buying in writing. Ask for a prospectus and written information on the opportunity. If they don’t like it, you don’t need to make an investment with them.

Looks can be deceiving

Just because someone looks nice doesn’t automatically mean that they are. Many scammers and con artists know that a good visual first impression may be a way for them to get in the door – and possibly into the wallet – of a victim. While many people think that a person in a sharp business suit who's clean-shaven and has a nice smile must be a friendly person looking out for their best interests. Some of the best con artists have good looks and a friendly personality. They use this to their advantage in order to convince their victims that they really have a great deal for them, but that they need to get in on it immediately. As soon as you write the check, they are going to be out the door and out of your life, along with your cash.

Don’t talk money if you don't know the language

The best target of investment and financial scammers are people that don’t understand money and investments. Con artists say if they can find an elderly person as a victim, they know that they may well get even more money out of them because seniors are generally not as savvy with their finances. This is especially true if they can find a widow or widower, as they often have insurance money in their bank accounts and are more trusting of others to help them make decisions, since their spouse of so many years is now gone.

Ignore the 'fear factor'

Many scam artists who are trying to get you to take the step of giving them your money will use fear as a motivator. For many people, if the emotion of fear can be brought into play, some of their logic will go right out the window. For instance, they may mention the types of events that could befall a person and cause them to expend their life savings or make them think that the savings they now have is insufficient to support them for the remainder of their golden years. These fears often convince people to take on risky investments that they under normal circumstances would not make. Don’t let the fear win out over your common sense. If an investment 'opportunity' seems to go against your better judgment, take heed to that and step away from it.

Report scams

Adding insult to injury, many people who are taken advantage of by scam artists don’t want to report it. It’s not that they don’t want a chance to get their money back or stop the scam artist, but they're embarrassed by the fact that they were a taken in the first place. The only way to stop scammers from striking again is to report them and help the police track them down.

Watch your cash

Even if you're convinced that you've made wise investments, you need to know where your money is and what it's doing. Keep track of your financial statements and returns so that you'll be quickly alerted to anything out of the ordinary.

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