How to Recognize Investment Fraud
- 1). Run a search for websites discussing the investment, the company and the people involved. If you can't find anything, this could be a warning sign.
- 2). Watch out for unsolicited investment offers, whether they come from an email, website, fax, letter or even a phone call. Often, con artists will sing the praises of fraudulent investments online and through other media to increase the hype and entice people to buy into them.
- 3). Resist potential con artists who urge you to act quickly or the deal will be gone. If the deal is legitimate, there is no reason why you shouldn't be able to invest in it after you've done your research.
- 4). Avoid investments that offer a guaranteed return on your money. A legitimate investment company will discuss the risks with you.
- 5). Ask the investment salesman for a number where you can call him back. If he refuses to give you one, it could be telemarketer investment fraud. Ask him to send you written information about the company and the investment opportunity. Con artists will often refuse to do so, or they might send you a colorful brochure that praises the investment while offering little actual information.
- 6). Avoid dealing with companies who instruct you to send a payment through a private courier or other private delivery service. This a common tactic to avoid detection by the U.S. Postal Service.
- 7). Verify the information the company gives you independently through your own research. If you cannot verify the company's claims, avoid the investment. Another potential sign of investment fraud is the claim that the company has insider information that no one else knows.
- 8). Ask the company representative as many questions about the investment as you can think of. If the investment scheme is fraudulent, answering questions may make the representative nervous. You may also notice that he refuses to answer a question directly, but rather he continues to play up the investment's high return potential.