Investment Scams in 2020 You Could Be Targeted By

While a new year may have brought new resolutions for you, it also comes with investment scams that consumers need to worry about. Some of them have been around a while, but others are relatively new and gaining traction. Most financial experts will tell you that a sign that an investment opportunity may be a scam is the promise of high returns. You should also be wary of anyone who says their investment comes with no risks. Nobody can guarantee an investment return.

Watch Out for These Scams

1.      Ponzi schemes

Over the last few decades, many notorious Ponzi schemes have made the news. While many people have heard of Ponzi schemes, few actually understand the inner workings of these investment scams. With these scams, investors are paid returns from their own money or money paid by future investors rather than from actual earned revenue through investments. This is unsustainable, and a Ponzi scheme often leaves the bulk of its investors with no money at all.

2.      Promissory notes

A promissory note is a form of debt, similar to an IOU or a loan. Companies may issue these to raise money. However, fraudsters throughout the country have begun to use promissory notes as ways to defraud investors. These individuals may convince somebody that they have a legitimate and lucrative company and promise major returns when in reality, they may not have a company at all or have no plans for growth.

3.      Real estate-related investments

These scams often come in the form of real estate investing seminars that market aggressively to alternative routes of owning and making money off of real estate. Fraudsters will typically brag about how much money they have made through simple real estate investments in an attempt to get your money with the promises of the same returns. In reality, your money is what they are profiting from and you may never see any returns.

4.      Cryptocurrency-related investments products

Cryptocurrency is incredibly difficult to understand and a relatively new type of investment. Because the typical investor does not fully understand cryptocurrency, fraudsters will make wild claims about possible returns with invested money. The reality is that cryptocurrency trading is volatile and not well understood, even by financial experts. Many well-known investment agencies do not even deal with cryptocurrency, so be wary of anyone promising high crypto returns.

5.      Social media and internet-related investment schemes

It is easy to get involved in social network groups and internet groups with like-minded individuals. Many fraudsters will use these mediums looking for those who want to make investments. Fraudsters will use social media and internet groups defined people who share similar backgrounds and personal information so they can make highly specialized pitches for investment scams.

How You Can Protect Yourself

The phrase “If it sounds too good to be true, it probably is” rings true with investments. If you are being promised high returns with little to no risks, you are likely being scammed. Research any potential investment opportunities presented to you. Investors should determine whether investments and their sellers are registered. You would not go to an unlicensed doctor or dentist, so do not invest with any unregistered agents. If you think you have been scammed, you may need to consult with an experienced financial investment fraud lawyer about your case.


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