The Lure of “Phantom Riches”

Who doesn’t want to build wealth? It is this desire that attracts people to investments that promise high returns. However, scam artists also use this wealth building desire to persuade individuals to invest their money. Scammers will dangle the possibility of wealth in front of investors, which is a tactic known as “phantom riches.”

According to the Financial Industry Regulatory Authority (FINRA), an investment scam will often take the form of a “big payoff” or “guaranteed returns.” This phantom riches tactic is one of the most common used by fraudsters.

This tactic can be described as follows:

• The scam artist promises riches, in an attempt to get you to make a decision based on emotion rather than logic.
• You invest your money, but get nothing in return. The scam artist can’t pay you, because the “riches” never really existed in the first place.

Avoid Investment Fraud

You can protect yourself from this common persuasion tactic. First, ask a lot of questions about the investment. Make sure you fully understand the information that has been provided to you. Often times, scam artists will make the investment appear complicated or obscure. Once you have your answers, verify them.

Before you make any investment, you should also look into the background of the investment representative. You can use FINRA’s BrokerCheck and should also contact your state securities regulator for information.

Lost Money Due to Investment Fraud?

If you have lost money in an investment scam, you may be able to recover your losses. Contact an experienced investment fraud attorney for advice and answers to your questions. A knowledgeable lawyer should be able to review your case and explain your rights.

For more information, contact the investment fraud lawyers at the law firm of Meyer Wilson by calling 866-827-6537 or filling out our online form.

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