The popularity of investment projects is growing daily, and along with it, the number of shadow fraud schemes is also increasing. Fraudsters exploit people's desire to earn money for their devious purposes, promising high returns with minimal risks. It is important to understand how to recognize shadow investment schemes and distinguish real investment offers from scams.
Financial fraudulent projects often disguise themselves as legitimate companies and promise incredible earnings without risks. Offering returns from 200% to 500% annually? Don't rush to transfer money – it is possible that behind the guise of company employees are swindlers.
How to recognize a real opportunity for income from fake investment offers? Pay attention to some characteristic features of projects that can cause serious financial damage.
Investment Fraud Schemes
Investment fraudsters are experienced psychologists who know effective techniques for influencing people, know how to generate interest, concentrate attention, and emphasize the necessary information.
1. Often fraudsters develop websites that are almost identical to the web resources of real banks or brokerage services. They advertise offers with high returns. The first thing that should raise suspicion is the level of income that can reach 500% annually. The first step of the scheme is to convince a person to fill out a registration form, and the second is to deposit funds into a virtual account. At first glance, there is nothing suspicious. Especially when a beginner investor is led by an experienced mentor. But the expert's goal is not to help the person achieve financial success, but to extract as much money as possible. Initially, the virtual account shows a profit from successful investments. But this is just a picture made to gain trust in the company. At this point, the money is already in the hands of the fraudsters.
2. Pyramids and Ponzi schemes – working by attracting new investors, whose investments are used to pay minimal returns to existing partners. But at a certain point, the active inflow of funds stops, and in an instant, this scheme collapses, leaving many participants bankrupt. 3. MLM clubs – the principle of deceiving people is based on multi-level marketing. Such a fraud scheme in investments is masked as a business operating legally. Some MLM combinations resemble a pyramid, where profit is possible only through the inclusion of new investors, not from the company's real activities and revenue.
4. Startups and ICO – "innovative" startups are created, for the development of which funds are raised through initial coin offerings. But in reality, the fraudsters simply disappear at the right moment with the collected capital. In some cases, when dealing with shadow projects, clients even receive small profits as dividends from invested funds. But this is all done as bait. And if they refuse to make another deposit, the fraudsters announce enrichment prospects and suggest taking out a loan to take advantage of the best financial offers that are active for only a few hours.
How to distinguish investing from fraud
The ideas of fraudsters are roughly similar, you just need to be able to see signs of a fraudulent investment scheme.
Several basic factors can help distinguish a fake from a real investment project.
What are the "bonuses"?
- promise significant profits in a short period of time;
- insistently ask to transfer funds immediately;
- conduct informational service unprofessionally, allowing rudeness and restraint in communication;
- demand access to personal data, personal accounts, or e-wallets;
- use logos and brands of popular banks, but do not have partnerships with them;
- advise installing suspicious applications;
- insistently recommend taking out a loan to continue the investment process.
Another, one might say, hidden sign that not everyone can identify is that the website of a fake investment project is poorly designed, but it is difficult to distinguish it from a real company.
5 rules that must be followed when investment offers are received
When a company for cooperation has already been chosen and the only thing left is to receive investment options, it is worth checking the honesty of the investment offers by requesting mandatory documentation. But this is not the only step that needs to be taken – there are a few more rules:
- Do not disclose card data and SMS codes;
- Do not make money transfers to strangers directly;
- Act without haste – official banking structures do not insist on prompt account replenishment.;
- Check information about the brokerage organization, project, or bank – this data is available in the public domain on official company websites;
- If you notice suspicious activity – immediately cease interaction.
What to do if personal data ended up in the hands of fraudsters? It is necessary to take some urgent actions: contact the bank's support service or block the card in the mobile application. This way, access to the funds on the card will be limited.
How to punish fraudsters?
It is difficult to find effective methods of dealing with fraudsters, but you can try to find a way to handle them. Since swindlers operate online, they can be located anywhere in the world. Catching them is difficult, but you can prevent them from carrying out their schemes. If there is an official website through which fraudsters advertise their services, it is worth informing large search engines about it. As a result, the site will be blocked, and the capital of many users will remain intact.
It is also important to share negative experiences with a particular company with a wide audience to protect newcomers from rash actions.
Fake investment offers from many companies remain a serious threat to individuals and businesses, especially in the era of digital transformation. Regular monitoring and referring to proven financial institutions will help minimize risks.