CHARGEBACKBASE offers a lot of information and resources to help you outsmart investment fraud.
In order to show you how good of an idea it is to invest, fraudsters usually employ high pressure and a number of tricks on the trade. Here are some common tactics:
- •The "Phantom Riches" Tactic: This tactic involves Dangling the prospect of wealth, enticing you with something you want but can't have. For example, "These gas wells are guaranteed to produce $8,600 a month in income."
- •The "Source Credibility" Tactic: Trying to build their credibility by claiming to be with a reputable firm or to have a special credential or experience. For example "Believe me, as a senior vice president of whatever name they call the Firm, I would never sell you an investment that doesn't produce".
- •The "Social Consensus" Tactic: Leading you to the belief that other savvy investors have already invested. "This is how “investor A” got his start. I know it's a lot of money, but I'm in and so is my mom and half her church—and it's worth every dime."
- •The "Reciprocity" Tactic: Offering to do a small favour for you in return for a big favour. "I'll give you a break on my commission if you buy now—half off."
•The "Scarcity" Tactic: Creating a false sense of urgency by claiming limited supply. "There are only two units left, so I'd sign as soon as possible today if I were you."
Dishonest advisers sometimes try to get veterans to transfer their assets so they appear to qualify for Aid & Attendance benefits but don’t inform them of the negative implications.
Knowing the important warning signs of financial fraud puts you in charge.
- Ask and Check
Ask the right questions and verify the answers before you work with an investment professional or buy an investment product.
- Social Pressure
It's often hard to resist an investment tip from someone in your social circle. Before handing over any money, you need to check out the investment and the person selling it.
- Investor Alert
Don’t be taken in by these frauds and scams. Learn how to protect yourself and your money.
Know the tricks internet fraudsters use:
Fraudsters can trick you behind the scenes by hacking your computer or mobile device, or they can actively approach you online, by phone or email. Here are some ways scammers try to reel you in.
- •Pressure you into making a decision:- They will use the terms 'last chance' or 'limited offer' to make you act fast. They don't want to give you time to check if their offer is real before you commit to it, and want you to commit to it early so you feel like you can't back out.
- •Become your friend:- By developing a friendly relationship with you, scammers know you're more likely to listen to them and go along with something they suggest.
- •Threaten you:- They will pretend to be from a well-known organisation or government department and try to scare you into giving them your personal information or money. They may threaten you with a fine, or say they'll disconnect your internet, take you to court, arrest or even deport you.
- •Persistent phone calls, text messages, or emails:- Scammers often approach a large number of people this way, in the hope of receiving a response. Once you respond, they will be persistent in contacting you and promising you wealth or opportunities lost if you don't take up their offer.
- •Fake social media profiles:- Some scammers create fake profiles and send you a friend request or message. If you respond, they then send you offers to make quick money or invest, or ask for money to help them with trouble they are having. They could also gain access to your personal information and steal your identity.
- Online viruses (also called worms or Trojan horses) can access personal information, infect your computer or mobile device and delete files.They can even use your computer to attack other computers. Here are some things to consider to protect yourself against these threats:
•Make sure you have good security software (anti-virus, anti-spyware and a firewall) and keep it up to date.
•Turn on automatic updates for the operating system (e.g. Windows) and update all other applications and software programs when updates are available through their official websites.
•Make sure your wireless network is encrypted. If you're not sure how to do this, contact one of our agents on the livechat on website