Scroll Top

How to avoid falling victim to an online financial scam | ABC News

One of the big trends in online fraud is the emer­gence of Fake Invest­ment Scams. Con­sumers are think they are deal­ing with major banks or invest­ment com­pa­nies but in real­i­ty they are being tricked into hand­ing over their life sav­ings to scam­mers.

In this sto­ry ABC News goes deep inside a scam to see exact­ly how one Mel­bourne man was tricked by scam­mers pos­ing as finan­cial advi­sors from JP Mor­gan. The real JP Mor­gan has noth­ing to do with it and didn’t even have any idea it was going on until much month after the scams had begun. The inside work­ings of these scam oper­a­tions are so clever it could hap­pen to anyone.nvestment scams lure you in with promis­es of teach­ing you how to make a lot of mon­ey quick­ly, eas­i­ly, and with low risk — usu­al­ly by invest­ing in the finan­cial or real estate mar­kets. Some­times start­ing with a free sem­i­nar, the scam­mers lat­er will charge you a hefty fee for their “proven” invest­ment tricks. But the real tricks are the lies they tell you.

Investment Coaching Scams

In an invest­ment coach­ing scam, the scam­mer will tell you that their “patent­ed,” “test­ed,” or “proven” strat­e­gy (or some­thing sim­i­lar) will teach you how to make mon­ey invest­ing in stocks, bonds, for­eign cur­ren­cy, or tax liens. They promise that their invest­ment approach will set you up for life — and even let you stop work­ing.

What to watch out for

They get your atten­tion with infomer­cials or online ads, encour­ag­ing you to attend free events or to watch free intro­duc­to­ry videos. But lat­er you find out that you have to pay a hefty fee to get the coach­ing they promise. They’ll show you suc­cess sto­ries of peo­ple who have used their coach­ing pro­gram. But you have no way of con­firm­ing that their sto­ries are true.

What to know

The truth is that the pro­mot­ers of invest­ment coach­ing scams exag­ger­ate the mon­ey you can make with their sys­tem. They also fail to give you the step-by-step guide they promise, and lie about oth­er people’s suc­cess. It’s all part of a mar­ket­ing scheme to get you to pay thou­sands of dol­lars for what turns out to be emp­ty promis­es.

Real Estate Investment Seminar Scams

In-per­son and online sem­i­nars about how to invest in real estate often pro­mote “risk-free” train­ing or busi­ness coach­ing sys­tems.  They may lure you in with big promis­es or guar­an­tees of finan­cial free­dom, say­ing they’ll teach you how to make lots of mon­ey. But many real estate invest­ment sem­i­nars are scams.

What to watch out for

The pro­mo­tion­al mate­ri­als and sales pitch­es used for real estate invest­ment sem­i­nars often make over-the-top claims:

  • Scam­mers say you can earn big mon­ey fast, regard­less of your expe­ri­ence or train­ing. But that’s not true.
  • Scam­mers promise their deal is a “sure thing” that will give you secu­ri­ty for years to come. It won’t.
  • Scam­mers say you’ll rake in mon­ey by work­ing part-time or at home. But most peo­ple don’t.
  • Scam­mers promise you’ll be coached to suc­cess each step of the way. But there’s often lit­tle coach­ing, and no suc­cess.
  • Scam­mers claim the pro­gram worked for oth­er par­tic­i­pants — includ­ing the orga­niz­ers. And it might have, for a few peo­ple, but most peo­ple nev­er make their invest­ment back.

Don’t be con­vinced by ads with suc­cess sto­ries of peo­ple say­ing how much mon­ey they made with lit­tle time, effort, and risk. Or ads that fea­ture celebri­ties prais­ing the pro­gram. Those kinds of claims aren’t reli­able and don’t mean the pro­gram works. Real estate invest­ment scams often use fake tes­ti­mo­ni­als and pay peo­ple to endorse their pro­grams.

What to know

For most peo­ple who invest in these real estate invest­ment sem­i­nars — some of which cost thou­sands of dol­lars to buy into — the pay-off doesn’t match the promise. In fact, most peo­ple nev­er get back the mon­ey they invest­ed.

How to Avoid Investment Scams

If you’re con­sid­er­ing pay­ing for a pro­gram that promis­es to help you invest your mon­ey, stop and con­sid­er these things first:

  • Sta­tis­tics and tes­ti­mo­ni­als can be faked. Scam­mers want you to believe their pro­gram is always suc­cess­ful. They might show reviews or tes­ti­mo­ni­als by peo­ple who’ve used their pro­gram and made lots of mon­ey. But those could be paid actors or made-up reviews. You have no way of con­firm­ing their sto­ries.
  • Scam­mers exag­ger­ate the sig­nif­i­cance of cur­rent events. Scam­mers fol­low the head­lines and use cur­rent events to make their invest­ment oppor­tu­ni­ty seem excit­ing, inno­v­a­tive, and time­ly. They want you to feel pres­sured to com­mit now with­out hav­ing ful­ly researched the offer.
  • No one can guar­an­tee a spe­cif­ic amount of return on an invest­ment. Scam­mers might claim that you can make thou­sands of dol­lars per day or per month for life. But they don’t tell you the risks. No one can guar­an­tee that an invest­ment will be suc­cess­ful. And if you ask ques­tions about the invest­ment, they might give you vague answers and focus only on how much mon­ey you’ll sup­pos­ed­ly make.

See the U.S. Secu­ri­ties and Exchange Com­mis­sion (SEC)‘s investor alert for more tips.

Read more on ABC News:–06‑2…

You may also like

Page 1 of 2

Leave a comment

Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.