Investment Scam Red Flags

A comfortable retirement in our later years starts with investment money in our current years. Watching money grow as it compounds is awesome but it is not a quick process. It is in our nature to want to speed that process along.

However, scammers and frauds count on these feelings of impatience to try to separate you from your money. It is essential to know how to spot a scam before you give any of your hard-earned money away.

Below are some of the red flags that are associated with investment scams:

1. A promise of a high return with minimal risk. Risk versus return is foundational truth of investing. The greater the return the greater the risk. If you are being told otherwise it is likely a scam.
2. The investment was unsolicited. If you are offered an investment that you did not inquire about but rather showed up out of the blue you should proceed extremely cautiously. If it was such a great deal they probably would have kept it to themselves.
3. They are using aggressive sales tactics. Scam artists will always be aggressive to get you to close the deal. They’ll refer to the “investment” as the opportunity of a lifetime or tell you that you are missing out by waiting. If you feel pressured to make a decision you should walk away.
4. They are asking for non-standard payment methods. Most investments are handled by check or bank transfer to a U.S.-based account. Scams will tell you to wire money to overseas accounts or use unconventional payments like gift cards or crypto. These payments leave you little to no recourse to get your money back.
5. They are not registered professionals. A big portion of investment fraud is committed by unregistered persons. Avoid people trying to get at your money who can’t show some sort of professional license.
6. No one else is involved in the investment. Most investments will also include accountants, law firms, and or brokerage firms. If no one else is involved or you are told not to contact any other party that is a big red flag.

So, be very careful out there and don’t get greedy. There are big rewards out there if you stay patient and disciplined!

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