5 Common Persuasion Tactics Used by Investment Scam Artists Investor Claims Is What We Do - All Day, Every Day
  • Super Lawyers
  • Million Dollar Advocates Forum
  • AV Preeminent
  • AVVO 10.0
  • Lawyer of the Year
  • Best Law Firms
  • Best Lawyers

5 Common Persuasion Tactics Used by Investment Scam Artists

Identifying an investment scam is not always easy. Scam artists are skilled in persuasion and they often know just what to say to attract investors. You need to understand the common persuasion tactics they use, so that you can avoid becoming a victim of investment fraud.

The FINRA Investor Education Foundation, AARP, Washington Department of Financial Institutions and the Florida Office of Financial Regulation partnered to train others on how to prevent investment fraud. In the document, Outsmarting Investment Fraud, these organizations outlined the common persuasion tactics used by scam artists, which are as follows:

  • Phantom Riches: This tactic involves “dangling the prospect of wealth.” People are lured into this type of scam, because of the promise of a big payoff or high rate of return.

  • Source Credibility: People are more apt to trust someone who appears to have authority. The representative might use some type of special designation or degree to build trust.

  • Social Consensus: The idea is if there is a high demand, it must be a good investment.

  • Reciprocity: An example of this tactic, which was provided in Outsmarting Investment Fraud, would be – “I’ll give you a break on my commission if you buy what I am recommending for you – half off.” Basically, it is doing a small favor in exchange for a bigger one.

  • Scarcity: This is one of the basics of economics. When something is scarce, it has a higher perceived value. Fraudsters lead investors to believe that opportunity is limited.

The Meyer Wilson Way

Results-Focused Representation
  • More than $350,000,000 Recovered
  • Voted Best Lawyers in America┬« for Ten Years Running
  • David Meyer is President of Public Investors Advocate Bar Association (PIABA)
  • Over a Thousand Investor Claim Cases Since 1999
  • Exclusive Focus on Investor Claims & Class/Mass Action Lawsuits
  • Deep Bench of Skilled Attorneys and Staff Members

We Recover Investment Losses

Helping You Take Back What Is Yours
  • Jury Verdict Won Against Prudential Securities $262 Million
  • Recovered for 100-Year Old Widow $30 Million
  • Recovered in Retirement Losses $10 Million
  • Recovered for a Large Group of Individual Investors $6.5 Million
  • Recovered for Elderly Victim in Ponzi Scheme Case $3.8 Million
  • Recovered for Elderly Ponzi Scheme Victim $3.2 Million
  • Recovered for More Than 50 Families of Ponzi Scheme in California $3.2 Million
  • Recovered for 35 Families in Northeast Ohio $3.1 Million
  • Losses Recovered for 20 Retirees $3 Million
  • Recovered for Retired Physician Against Major Wall Street Firm Prior to Filing FINRA Arbitration $2.5 Million
/

Talk to Our Team

Get Started with a Free Evaluation
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.