Fraud in the investment environment is quite common and is becoming more prevalent as the number of investors and the financial marketplace grows. Investors are often targeted by fraudsters trying to extort money or personal information through various forms of fraud, such as fake investment opportunities, cyber-attacks or identity theft.
How to avoid fraud in the investment environment?
1. Seek professional advice: Before investing, make sure you get professional advice from a licensed financial advisor or trusted source.
2. Check to see if the investment is regulated: Check to see if the investment is regulated by government agencies such as the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).
3. Seek information: Find out what other investors and analysts are saying about the company or product you want to invest in.
4. Be careful with exceptional promises: Be wary of investments that promise exceptional returns without risk. These promises are usually signs of fraud.
5. Don't sign anything you don't understand: Read all investment documents carefully and ask for clarification if you don't understand something.
6. Keep your information confidential: Never give out your financial information, such as accounts and passwords, to anyone who contacts you out of the blue.
Attention to detail
Fraud is often difficult to distinguish from the real thing, also because in many cases the fraudsters impersonate a well-known company, including logos and similar websites. At this point, it's important to focus on the small details that could expose the scammer. An example of such a detail is the URL of a website.