7 Ways Fraudsters Try to Scam Investors

By Elsie Dudukovich0 Comments

An Investor Alert from last June serves as a good reminder of the type of tactics fraudsters and scam artists use to lure new victims. 
According to the alert from the Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA), “Do not trust someone with your investment money just because he or she claims to have impressive credentials or experience, or manages to create a “buzz of success” around himself or herself.”
Here are some of the ploys criminals use to enhance or fabricate credentials in order to gain their potential victim’s trust:
  • Misrepresenting their education and inflating their professional experience
  • Lying about having been awarded honors that they have not received - or may not even exist
  • Pretending to hold certain professional titles to suggest that they have certain expertise, qualifications, or a position/title at a company
  • Utilizing traditional media sources, the internet, or social media to develop a public profile that gives them a false air of legitimacy
As with all investments, remember it’s vital to perform due diligence regarding the opportunity and the investment promoter.  
  • Ask for details 
  • Independently verify claims using reliable sources
  • Be skeptical if you do not receive direct, specific answers to your questions, especially if the information is conflicting or unable to be verified through an independent source  
Lastly, as stressed in the Investor Alert, “If someone falsely depicts his or her background and tries to sell you an investment, do not trade with the person, do not give the person any money, and do not share your personal information with the person.”