How to Recognize an Investment Scam

Heed the warning signs to avoid falling victim.

Sara Silano 4 November, 2021 | 1:56AM
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Scam 

Thousands of people lose millions to investment scams each year. The Internet has become one of the most popular tools used to commit fraud and criminals are becoming more and more sophisticated with their hacking techniques. Thankfully, there are some warning signs, which you can use to avoid falling victim to scammers.

What Is an Investment Scam?
Investment scams aim to get unsuspecting people to hand over money. They can seem perfectly legitimate, appearing knowledgeable with websites, testimonials and marketing material. The most famous kind of investment scam is a Ponzi Scheme, where money is collected from new investors to pay previous investors. Eventually, the money owed is more than the money being collected and the scheme collapses, leaving all the investors out of pocket. Today, due to the Internet and digital communications, investment scams can be much more complex. 

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About Author

Sara Silano

Sara Silano  è caporedattore di Morningstar in Italia

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