Investment scams aim to get unsuspecting people to hand over money – they can seem perfectly legitimate, appearing knowledgeable with websites, testimonials and marketing material.
The most famous kind of investment scam is a Ponzi Scheme, where money is collected from new investors to pay previous investors. Eventually, the money owed is more than the money being collected and the scheme collapses, leaving all the investors out of pocket.
Today, due to the internet and digital communications, investment scams can be much more complex. Some of these scams are so convincing, even professional investors have fallen victim to them.
Some common scams include where scammers clone the websites of legitimate firms, or get you to invest in scam and unregulated investments which offer returns much better than the rates being offered on savings accounts.