Investment and financial scams

Piggy bank with coins

Investment and financial scams are schemes where fraudsters deceive individuals or organizations into making financial investments, offering opportunities that promise high returns or exclusive deals. These scams often involve fake investments, Ponzi schemes, or misrepresenting financial products, aiming to defraud victims of their money. Victims can suffer substantial financial losses by investing in fraudulent schemes or products. Some scams can lead to bankruptcy or significant financial hardship. Involvement in certain financial scams can result in legal consequences, including fines or imprisonment. Scammers may also attempt to gather personal and financial information, putting victims at risk of identity theft . 

  • Beware of Pressure: Be cautious of high-pressure sales tactics or urgency to invest quickly.
  • Suspicious Promises: Be skeptical of investments promising unrealistically high returns or guarantees of no risk.
  • Independent Verification: Seek advice from independent financial advisors or experts before making investment decisions.
  • Watch for Red Flags: Be alert to other red flags, such as vague business models, lack of transparency, or inconsistencies in information.
  • Do Due Diligence: Conduct thorough research on any investment opportunity before committing funds.
  • Verify Credentials: Check the credentials of individuals or organizations offering investment opportunities. Research their history and licenses.  Consult that organization's website (as determined by published information, not the message from the sender). 
  • Use FINRA BrokerCheck to research the background and experience of financial brokers, advisers, and firms. Authorized by Congress, the Financial Industry Regulatory Authority (FINRA) is an independent, non-governmental regulator for all securities firms doing business with the public in the United States.
  • Avoid High-Pressure Sales: Refuse investments that pressure you to make quick decisions or commitments.
  • Diversify Investments: Diversify your investments to spread risk across different asset classes.
  • Educate Yourself: Stay informed about common investment scams and tactics used by fraudsters.
  • Cease Communication: Immediately cease all communication with the scammer and block their contact.
  • Monitor Financial Accounts: Regularly monitor your financial accounts for unauthorized transactions.
  • Report the scam to local authorities and the appropriate online fraud reporting agencies.  See  Report the Scam . 
  • Secure Your Accounts: If you shared personal information, change your passwords and enable two-factor authentication where possible. See Cyber Crime Prevention for more information.

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