Finance News

Types of Investment Scam

There are crooks who buy large amounts of one particular low-priced stock, then spam millions of people, telling them that it is a hot item and to buy now. låna 400000 When the price goes sky high, they will then dump all of their stock. The price of the stock then falls, and the gullible victims lose a lot of cash.

Ponzi Schemes

By now, everyone has heard of the Madoff scandal, and the destruction it has caused many businesses. A ponzi scheme is a type of pyramid scheme when someone (the swindler) promises other investors high profits from unreal or illegitimate sources, and earlier investors who were promised the same great returns are paid off by the current investor putting their money. The scheme was first introduced by Charles Ponzi in 1910.

Senior Fraud

Senior are some of the most targeted people for investment fraud because many see them as gullable and easy to persuade. Some also have a great sum of money (their retirement money)and the scam artists see this as the jackpot.

Affinity Fraud

Scam artists will try and lure you into their fake investment schemes by targeting identifiable groups that you feel and care the most about or belong to. Fraudsters often target religion, sexuality, ethnicity, or other characteristics deemed personal or sentimental. The fraudsters will try and gain your trust. Once this is achieved, many times the people who are being scammed realize something is ‘fishy’, but instead of going to the authorities, the scam victims try and work the problem out within their community or group, which just allows the scam artist more time to get away and more money to steal.

Telemarketing Fraud

Over the phone scams are just as likely as online scams. In fact, they can be even worse. Sometimes they will leave a message on your phone pretending that they are calling their friend telling them that “XYZ” is the stock to buy, trying to lure you into their stock, just to bolster their return on that stock. This usually is done in coerce with the scam “pump and dump”.

Prime Bank Scheme

A scammer promises an investor huge gains (as high as triple digit gains) in a short period of time with little to no risk, and tells the investor that he has information about the top stocks – the ones the banks invest in (scammer may refer to it as a ‘secret market’). The scammer starts off by telling a nice, enticing story about how only the most prestigious banks work together and make huge returns monthly and tells how the investor can get in on some of the action as well. This should be saying fruad all over it. And many organizations have said time and again, ‘there is no such thing’, however, a good amount of people still fall for these kind of scams every year. This scam is also known as a HYIP (High-Yield Investment Program).

Forex Scam

Although we do not talk much about foreign exchange on this site, it is still important to note this common scam. The forex scam (forex = foreign exchange) is when a fraudster promises the victim a low risk-high return profit in the forex market using very little money (a couple thousand dollars). This is possible, especially with margin trading, however, unlikely and dangerous if you are not aware of how the forex market works. Generally, the money sent to the fraudster is never invested into the market, but simply stolen and the scam artist is never heard of again.

Also note that many people sell trading charts and tools to help you trade. Some of the time this is true and some of the time it is not. For instance, you may get jipped in the service or product you purchase. If you plan on buying a trading chart or any kind of trade-enhancing device make sure you buy it from a trustworthy company. It would be beneficial if it had a money-back gaurentee on it as well. Also keep in mind that no trading chart can consistently churn out profitable gains and that although some charts may be better than others, no chart can gaurentee gains every time. Alpha-Investing can not vouch for any types of charts or trading devices at this time. We can niether suggest nor digress their credibility of assistance or profits/benefits.