First, what is an investment scam?

An investment scam is a type of investment fraud in which existing investors are paid with funds collected from new investors. Organizers of these phony investments frequently promise to invest your money and generate high returns with little or no risk. However, the fraudsters in these schemes do not invest the money. Instead, they use it to pay those who made earlier investments, and they may keep some for themselves.
How Do we spot them?

1. Abnormally high investment returns

Every investment involves some level of risk, and higher-yielding investments typically involve more risk. Be extremely skeptical of any “guaranteed” investment opportunity.
2. Vague business model

Stay away if you don’t understand the business model after a five-minute explanation. The investment’s business model should be simple to grasp, and as an investor, you should understand where and how returns are generated. 
3. Pressure tactics:

Investment scams frequently employ pressure tactics ranging from limited offers to timed gifts or rebates. The goal is to get you to commit your money without thinking.
4. The need for more investors

The ability of these schemes to attract new investors is critical to their longevity. The scammer will be unable to pay the prior clients without a continual inflow of new investors, and the entire scheme will collapse. Alarm bells should ring if a program focuses solely on recruiting others to join the program for a fee
5. Regulated or not?
Some investment scams may even claim to be regulated by the relevant authorities to mislead you. Please be cautious

Use the following strategies to keep yourself safe:

1. Bring the conversation to a close

Get in the habit of saying “no.” To put it simply, “Sorry, but I am not interested. Thank you very much.” Tell them you’ll consider it and get back to them. Have a plan in place to leave the conversation if the pressure mounts.
2. Turn the tables and ask questions: Ask and double-check before disclosing personal information.

3. Speak with someone before investing

If a salesperson says, “Don’t tell anyone else about this special deal!” be extremely skeptical. You will not be asked to keep secrets by a credible professional. Even if the seller and investment are both registered, talk to a family member or an investment professional before making your decision.

4. Take your name off solicitation lists. This is to reduce the number of sales pitches you receive.
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