When it comes to investing, whoever you are, whether your savings are small or large, whatever your knowledge, you can be scammed and lose a lot of money. Avoiding scams go hand in hand with knowing who these individuals, or sometimes companies, are. Scammers’ ploys are varied, but some signs can alert you. So how to recognize and avoid scams? Let’s see.

What types of scams can you stumble upon?

When traditional investments pay little, the temptation is great to try to find more profitable solutions. It is in this context that specific scams are developing:

  • Promises of unrealistic profits.
  • False investments in new sectors.
  • Fraudulent financial advisers.
  • Identity thieves.

Scams don’t just happen to others! Indeed, 30% of investors have already been approached by companies offering investments in atypical investments.

Some online trading websites make you believe that you will become a trader after a few days of training and make a lot of money quickly. The vast majority of people who have invested in it have lost their entire stake and more. While many websites are licensed, many are scams. So make sure to check out broker review and financial regulatory bodies’ websites to see if the broker is registered.

False promises to reimburse lost funds

Fake financial professionals, phony law firms, and people supposedly appointed by an authority offer savers who have lost money on trading sites to recover their funds in return for payment. It’s also a scam.

Atypical investments

Investment diamonds, wines, renewable energies … Companies offer investments in these “atypical” or “alternative” investments supposed to bring high returns, but also with high risks not always announced. Again, scams can be hidden behind these investments. If these offers do not have a registration number issued by the financial authorities, it is an illegal activity!

Identity theft

Some crooks pose as sites of authorized companies, which most of the time do not offer the proposed placement. These people often insist that you check official records to prove their supposed “good faith” to you. Be careful: the difference between their website and the authorized website they have spoofed will play out in a few details, such as changing a letter in the name of the company or the site’s address. Simply verifying the presence of a company on official registers is therefore not sufficient to avoid scams.

What is a Ponzi scheme?

Be careful with the right placement that would only be reserved for a privileged few and that you would hear from someone close to you. In some cases, these can be scams. A so-called independent advisor manages to convince people to make the first payment. This money is used to pay false returns to other savers who, in confidence, advertise it around them.

This scam is sometimes called a “Ponzi scheme”: each saver is responsible for finding new savers and the payments of some paid to the others. When the fraudster can no longer get new payments or reimburse those who want their money back, he or she disappears.

Tips on how to avoid Forex scams

First, investing securely means knowing how to distinguish serious companies from untrustworthy companies. When you invest online, you entrust your savings to services that you only know virtually. You can’t talk face to face with a consultant, and that can hide some pitfalls. You’ve heard of online financial scams, often related to trading or cryptocurrencies. If you want to avoid ending up in these web traps, there are a few tips:

  • Check online reviews of the service,
  • Check that the platform has the necessary authorizations to exercise its activity;
  • Do a Google search before relying on the broker (using keywords such as “COMPANY NAME + review/scam? / Is it safe?”).

The transparency of investment service is also recognized by the website’s structure, the clarity of its content, the customer support quality.

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