Have you ever fallen victim to an investment fraud before? Even if you haven’t exactly been a victim, you probably have received unsought sales pitch on a phone call. Or you know someone who has been subjected to it.
Investment fraud is any investment-related scheme or deceptive activity that convinces investors to make decisions based on false or ambiguous data. People fall for such scams for reasons such as the attractive financial gain promised, being too optimistic, the uncertainty of the financial environment and also because they believe they are knowledgeable or too smart to fall for it.
Here are 5 steps you should follow.
1. Know the salesperson:
Before you invest, spend some time checking out the person promoting the investment. You should also find out if the salespeople who reach out to you are allowed in your state to sell securities and if they have had troubling encounters with officials or other investors. Always do your findings even if you know them socially.
2. Don’t give out personal information and bank details:
Never share your data over the phone or via email, especially if you’re coerced to or if you have doubt that you’re dealing with a legitimate corporation. In fact, you should take it as a red flag once there’s pressure to send your details immediately. True investments are usually built on trust and your personal data or bank details are not the basis of such trust.
3. End ambiguous deals immediately:
Most fraudsters do not sound very convincing when they start to pitch their deals. It is when you ask questions that they then feed you with information you want to hear. Once you receive an offer that makes you question its legitimacy, don’t ask questions. Don’t go further with them. Even if they sound convincing enough, you still need to do your own digging. If you get an investment-related phone call that you’re not anticipating, hanging up is the best course of action.
4. Check the original source:
It’s best not to open an email from an unknown source. But if you do so before verifying that it’s from an authentic source, do not click on links or attachments in the body of the email. If you wish to identify the organisation, try typing in the web address of the organization in the browser and use its “contact us” page to go directly to the site.
5. Research before you invest:
you shouldn’t invest in anything you can’t afford to lose. If you believe you have found the right investment opportunity, before spending your money, carry out your own investigation and obtain independent financial advice from a certified financial advisor.
You need to protect yourself both online and offline from investment scams. Remember that you can never be too careful because nobody is immune to investment fraud.