June 18, 2024


Business & Finance

4 Signs That An Investment Could Be a Scam

3 min read
The 7 signs of an investment scam and what to check before parting your  money

Investment scams are rife. So many people are trying to make their money work for them in this struggling economy. The people who invest in the right business today could find themselves to be millionaires in a couple of decades, hence the attraction towards making investments. This is all good and well, however, several investment scams are circulating with the rise in interest to invest.

From hundreds of pounds to even millions, investors are finding themselves drawing the short straw due to their investment funds being stolen by fraudsters promising high returns, then disappearing with the funds. The truth is that a lot of investment scams are not obvious. They are becoming more and more bespoke and undetectable. With this being said, you should always stay clear and informed when making any financial decision, and be sure that the person you are working with is entirely trustworthy. In this blog post, we will share the telltale signs to look out for when spotting investment scams, and how to act fast to prevent your investments from being stolen. Take a look at the following tips:

The company is not FCA-registered 

First things first, be sure that you are investing in a reputable, FCA-authorized company. Understanding the history of the investment firm, or investment broker you are working with is essential for financial stability. Do they have evidence of their good reputation? Are there obvious signs that they are legitimate? Most importantly, you need to ensure that they are registered with the FCA (financial conduct authority) which keeps them to strict guidelines that they must adhere to. If they have little evidence of their history of operating and are not registered by the FCA, forget about investing with them.

You have unanswered questions 

Investment scammers are known to keep you in the dark about many things. Whilst you may have some experience working with an asset manager who takes charge with little effort from you, you should always be involved and informed at the beginning of working with any new investment or broker. Broker scams are also common. Scammers will keep you in the dark, and leave many of your questions unanswered to avoid their true intentions from being revealed. If they can not be transparent at the beginning of your relationship, you should only expect things to get worse.

You feel rushed to deposit your money 

Scammers will invest seem time-dependent and therefore will pressure you to deposit your investment as soon as possible. No reputable asset advisor or investment entity will ever pressure its investors to spend money before they feel completely confident in the investment. Even then, you should always have an opinion from someone internal and financially literate such as a financial advisor to be sure the investment is legitimate and protected.

High return low-risk investment 

Finally, the biggest telltale sign of an investment scam is the promise of high return with little risk. Investment scammers will offer the opportunity of great financial returns, whilst downplaying the risk and effort needed from the investors. While this may sound like a dream for investors, you should be aware that if it sounds too good to be true then it likely is.  

Bottom line

Overall, investment scams will constantly evolve for years to come, staying ahead of the curve and managing your finances with caution is key. Stay up to date with the latest scams such as hyperverse scams, and be aware of any scammers that may approach you with false opportunities.

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