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Investment Scams

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The Dangers That Prevail In Investment Scams 

Investment scams are not a new phenomenon. They had existed since the 1800s when the US Government tried to regulate them. However, they became more widespread in the 1930s during the Great Depression, and then after that, they never really died out. The first documented case of a Ponzi scheme was in 1920. Charles Ponzi found success in this fraudulent practice by promising investors 50% profit in 90 days, which was unheard of. Investors would give him their investment, and he would pay them back with the money collected from other investors. After a few months, Ponzi brought in $250,000 per day, and people were falling for his scam. 

One of the growing and popular industries today is the investment sector in the financial aspect of any country’s economy. The idea of investments dates back to the 18th century in the Dutch Republic. It was during this era that we made the first recorded financial investment. Over the years, this has taken a great shape, with investment becoming another source of income for individuals, organizations, and even countries. As expected with every positive opportunity, there are always pitfalls established by unscrupulous individuals or organizations to extort money from unaware victims who fall into their schemes. The purpose of investment is to put an amount of money to use and eventually reap some profit from this venture. This article will look at what investment scams are, the types currently being used, and how to avoid this pitfall.

If you are a victim of an investment scam, you probably feel ashamed, helpless, and devastated. Know that this can and has happened to the best of us. What happened to you was a violation of your trust, and we understand just how you feel and what to help.

Cryptocurrency-Related Scams

Cryptocurrency-related investment scams are popular scams making waves in the investment industry, with the Federal Trades Commission (FTC) receiving complaints and reports now and then. Certain cryptocurrency investments are very credible with well-proven results. Still, others try to take advantage of this relatively new industry. Many people have reported losing their life savings through this investment scam.   The nature of this investment scam makes it difficult for authorities to be on top of matters, thereby giving opportunity for these scammers to flee the arm of justice. Before investing, know that you are being exposed to a lot of risk with little or no benefits.

Cryptocurrency scammers are at it again. They will use any trick in the book to dupe you out of your money and leave you with nothing more than a few broken dreams. Cryptocurrency-related scams work like this: they act as a group, also known as “pump and dump”.They create a fake token and make sure to spread the rumor that it will soon be worth more than its price. This increases the demand for the token and deceives investors into buying it, which in turn skyrockets its price. The scammer then makes a sale order before the price falls again because of oversupply on the market. In addition to creating fake tokens, those who are into Cryptocurrency related scams are also using social media ads to convince potential victims of their legitimacy. The best way for us to avoid these scams is by being informed about them beforehand: research and read about them extensively before investing or giving out information or money.

crypto currency

Binary options are a gamble. You either win or lose. That is why they are called binary options because there is no other settlement possible. It has become an increasingly popular financial instrument because of its simplicity. It allows traders/investors to gamble on whether an asset’s price will go up or down in the future. With this investment, you know what you stand to gain before trading. The binary options fraudsters will actually play with the prices, offer you lucrative bonuses, and manipulate the software to lure you into investing more money. Most of the illegal and unregulated binary options brokers will just disappear to their clients.

Forex Scam

trading forex trade stock

Forex scams are all the rage these days, especially among the people who are just finding out about this form of trading. However, you should know that Forex trading is not a scam. The market is open 24 hours a day, five days a week, and offers much more liquidity than traditional markets. Forex Scam is also called Fake Forex Brokers. It’s scariest because scams are not limited to binary options trading like other forms of investment. Scammers create fake forex companies and lure their victims into believing they’re legitimate so they can steal their money when they deposit to start trading after knowing the victim has lots of funds in their account and then suddenly stop answering the phone. Forex scams are not just a single group of traders, and there are many ways they can be deployed.

There are many Forex scam types, and some of them are shown in the following list:

  1. Fake Trading Accounts
  2. Fake Brokers
  3. Stock Scams
  4. Unregulated Brokers (possible scams)

We have all come across this investment scam that offers the opportunity to use your money in investing in foreign currencies. These investments promise the hopes of gaining returns on the changes in the rates of certain currencies. Unfortunately, this type of investment scam comes with high risk, leading you to lose all your money. Forex scams work by these individuals or organizations going after their victims through advertisement and any other means. They then invite their soon-to-be victim to a seminar to explain the whole process; the victim would not be given the full details of the operations. People who express interest in this scam are then influenced by using high-pressure sales techniques to join the business. The victim is given documents with no legal backing to sign. They are then asked to send the money to a foreign account to be managed by so-called experts, who then either disappear with the money or make poor investment decisions.

Pyramid Schemes

Pyramid schemes work just like the Ponzi Scheme. The only difference is that you are tasked to bring in recruits. Companies involved in this scam lay it to the public notice of the enormous profits they can payout to their investors. With Pyramid Schemes becoming a victim can be easy since they can brand themselves in a more professional marketing manner. Investors only gain their returns when they can introduce recruits into this business. As time goes on, this business tends to collapse and disappear when no more recruits show up.

The above are just some of the investment scams used today, with some just switching names and rebranding themselves. Millions of dollars are lost to these scammers, and the chance of recovering your capital is nearly impossible. GlobalPayback, which is keen on helping get monies stolen through these investment scams online, has emerged and is helping fight some of these scams. 

what is pyramid

Binary Options Scams 

It is common to see binary options fraudsters run social media ads that link to credible, legit-looking websites. The scammers will claim to be an international firm with a global presence. Once the scam firms gain your trust, they will manipulate the system to distort prices and payouts. They will then close your trading accounts without paying your money. Binary options scams are often referred to as a type of high-risk investment where the investor trades cash for a predetermined amount of shares. These scams refer to a type of manipulation that originates from the broker’s side. It is executed by brokers to give traders different signals about an option. These signals are false and misleading to the trader, intentionally so. This will lead him to think about whether he should buy or sell an option, and is often done in a very convincing manner, appearing like a legitimate trading strategy. Binary options trading has become a popular investment option, especially with the binary options scams that are now in existence. 

The fraudsters are always trying to find new ways to fool people through new scamming techniques, but the methods remain the same. They take advantage of people who are unaware of what binary options are and how it works by offering a lucrative return without any risk. The golden rule of investing is that if something seems too good to be true, then it probably is, and this rule applies to binary options scams as well. The fraudsters get around regulations by using offshore websites and setting up bases in countries where regulations are lax. Scammers lure their victims with the promise of easy money, often claiming they are self-made millionaires who have studied and mastered the binary options trading system. They offer two options: they can trade on behalf of their victim, or they can teach the victim how to trade.

binary girl

Victims choose the latter option, giving scammers all the information necessary to set up a scam account. Binary options scams are thriving because people are not aware of how these platforms work. Many people are losing a lot of money when trading on these platforms and don’t know about it until it is too late. These scams happen because scammers trick people into believing that it is a legitimate platform for trading binary options and make them think that there is a chance for them to make money from it if they give away all of their funds.

Ponzi Schemes

ponzi schemes

A Ponzi scheme is a form of fraud that lures investors. The scammer will offer high returns in the short term with the promise that it will grow tremendously. As the scammer continues to pay off early investors, new clients will be drawn in, creating an illusion of stability. However, this can only continue for so long until, eventually, when it inevitably collapses, and all the money goes away. It is an investment scam where the operator generates returns for older investors through revenue from newer investors rather than any legitimate business activity. Ponzi schemes are often run by individuals who amass large sums of money through false or misleading statements and promises. The scheme starts when the founder tells investors they will get a high rate of return on their investments and then uses their money to pay off earlier investors. The fraudster appears to be generating consistent profits to continue to repay the old investors with new investor money. In reality, this is not the case, and eventually, the whole operation collapses and leaves all involved (except for those at the top) with losses. This Scheme is one of the most popular investment scams that are in existence today. So many people have fallen victim to this type of investment scam. 

This investment scam started in the United States of America with one man named Charles Ponzi. A Ponzi Scheme works by requesting an initial fund from their victim with a promise of paying them an outrageous amount of profit within a short possible time. I bet the question you are asking yourself is, how do they pay the promised returns. Ponzi Schemes work on the principle of” robbing Peter to pay Paul”; money received from investors is used to pay the returns on their various investments. Investors that come first are paid early to show how legit the investment is; these investors are then encouraged to reinvest their returns into the business. In some instances, people who invest with Ponzi Schemes are not able to recover their initial capital. One way to avoid Ponzi schemes is to check with the proper authorities on their authenticity.

Protect Yourself From an Investment Scam! 

We’re going to discuss the most common tips for different types of investment scams. So if you’ve been thinking about investing in any financial products, this will help you protect yourself against being fooled by scammers.

Be aware

The first step is to be aware that scams exist. This will help you spot them better, especially when they are disguised as legitimate offers. There are some signs you can look out for, such as an urgent request to invest in something, unsolicited calls, emails, or texts with promises of high returns. You should also keep an eye out for investment schemes that sound too good to be true.

Do your research

Always research the company thoroughly before investing in it and make sure it’s legal and regulated by the SEC (Security Exchange Commission). Experts usually recommend conducting thorough research of the company and its product before investing. This way, you can carefully investigate their products, audited financial statements, and other information to verify if they are authentic. A lot of investors also recommend looking at the background of the company’s founders and board members. Keep in mind that if something sounds too good to be true, then it probably is, so do not let your guard down and blindly invest in anything!

Be curious

Fraudsters succeed because most victims do not ask the burning questions and are generally naive. So do your independent research, and you will likely find holes in their story. 

Do not be swayed by the grandeur

Fraudsters love to put on a show, especially in investment scams that deal with vast sums of money. They will show ”proof” like their office, testimonials and referrals from past clients, a legit website, etc., all in the bid to convince you of their legitimacy. So before investing, check with the investment agencies in your country to see if the company is who they say they are. 

Fraud blocks through magnifying glass on desk

Are You A Victim of Investment Fraud? Contact The Chargeback Global Today

Investment scams are a growing trend in the 21st century. It is very simple for thieves to steal funds by posing as a bank or other financial institution and asking for personal data, such as bank account or credit card information. Did you transfer funds and get scammed? You are not alone. We ask that you act fast by contacting us because the time frame is essential, and every day counts. Luckily for you, we have wealth recovery professionals on our team who know exactly how to get your money back in the shortest time frame. 

So contact us with details of your transactions and dealings with the scammers and leave the rest to us. We will help you recover your funds and your life back. Whether it is by a friend, a family member, or someone you met online, fraudsters know how to persuade people into giving them their money. has been helping victims of wire fraud for more than 20 years. Now they are able to help even more people with the power of artificial intelligence and machine learning.

Why am I being asked for a Letter of Intent (LOI)?

A letter of intent is a non-binding document written and signed by one party to another stating a willingness to do business. No party is obliged to do anything said in the document unless agreed upon within the letter. Before signing any document, you need to consult an attorney. A letter of intent speaks of a plan to do business and not a commitment or obligation to do it.

Note that your signature on a valid LOI can be considered a contract. However, any document you sign that intends to unwittingly involve you in a crime is regarded as a valid document.

What’s the point of persuading me to sign an LOI?

First, know that the scammer is trying to establish control. They want to make you feel obliged to honor your end of the bargain because a written commitment has more effect than a verbal one.

The fraudster is likely not to give you concrete answers about the investment because they want you to sign the document. However, once you do, you are in a vulnerable position because you have empowered the fraudster. Also, you have given your address, telephone number, fax number, and whatever other numbers he may have stated are required.

Why do I have to provide proof of funds before anyone tells me the investment details?

Fraudsters do not like to waste time, so they ask for proof of funds to ensure they are dealing with a real investor and not an intermediary. They also do this to intimidate you into proving your capability to be taken seriously.

So, once you have given him proof of funds, he is secure that there are assets to steal. Additionally, you have provided him with the name of your bank and maybe even an account number. So now he has access to your funds.

Won’t a personal introduction to the Trader prove that the investment is valid?

Remember that nothing matters when dealing with fraudsters, not even fax copies of alleged transactions. Know that the fraudster will pull all the stops to convince you that the investment is legit. 

By the time the fraudster agrees to introduce you to the so-called Trader, you have been rigorously prepared. You have been told that this is a privilege awarded to the lucky few, that the ‘Trader’ does not waste his time with just anyone. You have been persuaded that you are extra-extra special. This is a very effective form of brainwashing used by fraudsters. It works because everyone wants to feel special, never mind extra-extra.

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