8 Tips For Avoid Online Investment Scams
In the modern world, investment is more accessible as a result of the advancements in the use of the Internet for trading. However, these same factors have also provided an even more fertile ground, for deceptive scammers to exploit the unsuspecting investors scams. Thankfully, these are avoidable through extra caution, and not sending money without conducting research on the company or platform in question.
- Check Registration Status
To avoid dealing with a dodgy company, make sure a firm is regulated and secure by the right financial body. In the US, there is FINRA’s BrokerCheck or Investment Advisor Public Disclosure database offered by the SEC.
There is nothing wrong with earning money from it, but when investing in or transacting with cryptocurrency companies, check their licenses. The firms that have not registered with the regulatory body do not receive supervision and most probably do not follow the rules formulated for the protection of investors.
- Research The Company
To get an idea of the credibility of any company or an online platform that asks you to invest your money, simply search for the complaints that people have made online. Perform research on the scam reporting websites to find out the warning that other investors had given after they lost their money.
Also, search for important people associated with its operations through LinkedIn and other relevant websites. Failure to find such information should raise alarm because it may indicate that the leaders are involved in criminal activities.
- Beware “Guaranteed” Returns
Invest wisely in line with the performance expectations that are realistic. Sometimes these fraudulent activities portray high and virtually certain rates of returns to potential investors as a tool of deception. However, every type of investment always involves certain risk factors and no legitimate platform can ever promise high returns.
The miracle worker, the get-rich-quick scheme with little or no risk is generally always a scam. The adage ‘there is nothing in this world that is free’ could not be truer than in the case of online business models that are too good to be true.
- Avoid “Act Now” Pressure
Be wary of salespeople who tend to push you to buy their product and make an investment right now or else you will lose out on an investment opportunity. Fraudsters usually encourage the targets to send money before they have adequate time to make necessary scrutiny on the promising venture.
It is always unwise to allow someone to force you to make investment decisions that you have not fully assessed. Any sensible financial planner will appreciate the fact that you need to consider all aspects of an offer or proposal.
- As much as possible, make it a habit to double-cross where your money is going.
Be aware of where your invested monies end up going because you need to be certain that the funds go to the intended purpose. Some Pyramid scams use other people’s money from the next layers to pay the previous investors instead of using returns on investment.
Accompany direct questions that relate to how new investor money is deployed before the ROIs can be paid out. Investors should closely watch the direction that their money takes after they have invested so as not to end up being part of the pyramid.
- Avoid “Account Managers”
Here, scammers may provide clients with personal account managers who can (and often do) falsely inform them about the possibility of placing orders. Yet, it gets worse as these account managers mess with the customer accounts for their own self-serving interests.
Spending and investing decisions should be closely monitored or implemented directly by you, without intermediaries. Involving middlemen poses the risk of scams since one has to rely on them to make payments or receive payments from the other party.
- Use Strong Passwords
Whenever you create an online account with information regarding your financial status, devise strong passwords. Use only symbols, numbers, and letters randomly without combining to form any word for higher security.
If this is possible, then users shall be encouraged to turn on two-factor authentication. Investing your money, if your data is stolen and criminals successfully pilfer funds, even authentic platforms does not compensate for the loss.
It is also important to note that there is always a risk of being a victim of a phishing attempt.
Be wary of such fake emails especially those containing links with the intention of getting your personal details. Confirm that the sender address contains minor spelling mistakes or uses a slightly different name of a legitimate company.
Never follow links or open attachments that are sent by unknown persons or from companies that are unfamiliar to you. Phishing scams are a reality that can jeopardize login credentials, leaving your money in the hands of thieves to invest fraudulently.
- Trust Your Instincts
In this case, if an investing opportunity seems to make you feel wrong or if you receive some sort of alarm bells ringing, then do not proceed to invest. As much as it is possible for any company to produce actual, one should not force themselves into uncomfortable positions just to invest.
For those who are searching for a platform to work with, it is advised to collaborate only with platforms that provide you sufficient information on any question you ask. Safety should also be considered regarding your money; you should leave any conversation that makes you uncomfortable.
This means that by being careful when choosing platforms to use, knowing the dangers of the internet, limiting oneself on the sites that one can visit, and being able to rely on one’s own discretion one can safely engage in online investments. Exercise caution and do not fall for what promises profits in the shortest time possible without sufficiently researching the involved processes. Just as people need to be aware of financial fraudsters, they should never invest in any opportunity without having to do due diligence and reasoning with the head rather than the heart. Use these tips to invest profitably with a low risk of enormous loss due to fraudulent activities.
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