Investment Scams

Protect your savings from Ponzi schemes, fake investment opportunities, and financial fraud. Learn to identify legitimate investments from scams.

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How Investment Scams Work

Investment scams typically promise unrealistic returns with little or no risk. Scammers often use sophisticated marketing materials, fake testimonials, and pressure tactics to convince victims to invest quickly. They may initially pay some returns to early investors to build credibility before disappearing with the money.

These scams often target people approaching retirement or those looking to grow their savings quickly. Scammers exploit people's desire for financial security and fear of missing out on profitable opportunities.

Common Examples

Ponzi Schemes
Fraudulent investment operations that pay returns to earlier investors using money from new investors rather than legitimate profits.
Pyramid Schemes
Investment scams where participants make money primarily by recruiting others rather than selling legitimate products or services.
Fake Cryptocurrency Investments
Scammers create fake crypto investment platforms or coins, promising huge returns before disappearing with investor funds.
Advance Fee Investment Scams
Fraudsters promise access to exclusive investments but require upfront fees that are never returned.

Warning Signs

  • Promises of guaranteed high returns with little or no risk
  • Pressure to invest immediately or miss out on opportunity
  • Unregistered investment advisors or unlicensed brokers
  • Vague or overly complex investment strategies
  • Difficulty withdrawing funds or accessing your money
  • Testimonials that seem fake or too good to be true
  • Investments not registered with regulatory authorities

How to Protect Yourself

  • Research investment advisors through FINRA BrokerCheck
  • Verify investments are registered with SEC or state regulators
  • Be skeptical of guaranteed returns or "risk-free" investments
  • Get all investment information in writing
  • Understand the investment strategy completely before investing
  • Never invest money you cannot afford to lose
  • Seek independent financial advice before making large investments

What to Do If You've Been Scammed

  1. Stop sending money immediately and cut all contact with the scammer
  2. Contact your financial institution to report fraudulent transactions
  3. File complaints with SEC, FINRA, FTC, and local law enforcement
  4. Consult with an attorney about potential legal remedies
  5. Report to state securities regulators in your state
  6. Document all communications and transaction records
  7. Be wary of recovery scams - scammers may contact you offering to help recover lost funds

How to Report Investment Scams

Securities and Exchange Commission (SEC)

Report investment fraud and securities violations

Report to SEC
FINRA Investor Complaint Center

File complaints against brokers and investment advisors

Report to FINRA

Remember: If It Sounds Too Good to Be True...

Legitimate investments carry risk, and higher returns typically mean higher risk. Be extremely cautious of any investment promising guaranteed returns or "risk-free" profits.

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