How to Avoid Investment Fraud and Scams

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By W. Scoggin
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Avoid Investment Fraud and Scams

When the stock market is down, no one profits, right? Well, this is the perfect time for scam artists to make some quick money by way of investment fraud. Investment fraud is not new. It has been a problem for years, and is hard to regulate. As the stock market goes down, people start looking for quick ways to make up for loss. This is how they usually happen upon the "deal of a lifetime." This article will give you some basic investment tips, and what to look for when it comes to investment fraud.

Difficulty: Easy

Instructions

Step 1

First, any deal that sounds too good to be true, most likely is too good be true.
Step 2

Do not be pressured into making any decision on the spot.
Step 3

Take the time to check out every investment offer. Some good resources to check offers are your state securities regulator, the Securities and Exchange Commission website, and the North America Securities Administrators Association website.
Step 4

Most unsolicited emails concerning investment opportunities are fraudulent.
Step 5

Know the different investment types, such as CDs, stocks, and bonds. Knowing all you can about investing, before you invest, can help you catch investment fraud.
Step 6

Make sure that anything promised to you is in writing. A lot of investment fraud starts with a verbal promise from a "trustworthy" individual. If your "trustworthy" individual avoids documenting his guarantees in writing, then that should throw up a huge red flag for you.
Step 7

All investment have at least some risk. A "no risk" investment should also throw up a red flag for you.