How To Spot An Online Investment Scam

Online Investment Scam
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Anyone can just easily make fake ids, companies, and websites in this day and age. And it’s hard to tell a fake one from a legitimate one, as they seem so similar. People involved in Online Investment Scam would even make up really good and believable stories just to entice you to invest in their company.

And to make it more convincing, they will promise to help you get more money and quadruple your initial investment without any risks whatsoever. They will also present fake documents to prove their legitimacy and will tell you to simply follow some instructions to gain profit.

That right there is a waving red flag. In a true business, there is no such thing as low risk with high return. If you’re suspecting that a company is too good to be true, you’ll find in this article some tips on how to spot an online investment scam.

The Big Red Flags

It’s no surprise that these investment companies use tactics to lure investors into the business. On top of the catchy company taglines and the convincing documents they present, they also offer big payouts, easy money, guaranteed return of investment with little to no risk. If you want to get more information on this, you may look for a website that can help you identify these online scams.  In addition, you can take the necessary precaution by looking out for these red flags:

  • You get unsolicited phone calls and texts.  
  • You get emails and newsletters from unverified sources. 
  • You get invited into their organization, with free meals and travels offers. 
  • They’re a penny stock company. 
  • You will be given sketchy details about their company. 
  • They have claims of breakthroughs. 
  • They give complicated answers and explanations using complex terminologies. 
  • They offer you to get on board immediately.  
  • You are guaranteed a high return without any risks. 
  • You are asked to make a decision as soon as possible.
  • The contact information on their website is only mobile numbers and PO Boxes addresses. 
  • You will be asked to deposit in different accounts and will say it’s for security reasons. 
  • You cannot call them back or do a follow-up on the status of your investment.
Common Investment Scams
Investment fraud result of checking financial documents.

Common Online Investment Scam You Need To Take Note Of:

  • Ponzi Scheme uses new investors’ money to pay off former members’ initial investment. They will require their members to invite more people to get constant cash flow. Otherwise, their business will collapse.
  • Offshore Investment Scams will tell the investors to deposit their money in offshore accounts. And to make it seem convincing like there is money movement, they will send you bank statements and updates. They do this to avoid paying taxes. Additionally, when they run out of funds, the company will collapse.
  • The Prime Bank Scheme will get you invited in their secret trading organization. They will tell you that only the rich and powerful corporations get invited. Additionally, they will ask you to sign an NDA (Non-Disclosure Agreement). The movement of money is similar to that of a Ponzi Scheme, it stops when there aren’t new investors.
  • Romance Scams get their target to become romantically involved with the intention of stealing their money. Fraudsters are usually found on dating sites and will never do video calls, meet you in person, but will persuade you to send them money.
  • Retirement Savings Scheme offers you access to a portion of your income plan without having to pay taxes. The scammers will tell you to transfer your funds to a self-directed account. They make you believe you have full access to your retirement fund.

Invest cautiously and learn to protect yourself from investment scams or financial exploitation. Do not deal with them at any cost. Here are some of the things you can do to counter their tactics:

  • Reject any unknown calls and texts, block and report unsolicited emails, and turn away from strangers who are knocking on your door. Don’t give your personal information such as account numbers and log-ins. Legitimate investment companies will never ask for either of those.  
  • Do your research. Use your free time to review their materials and website. Always check their listing on stock exchange to see their current and updated shares performance. 
  • Don’t invest in anything you don’t fully understand. And, don’t send money to anyone you barely know, no matter how convincing they are. 
  • Verify their credentials. You may check with the SEC (Securities and Exchange Commission) to confirm the legitimacy of their company
  • Never commit to anything on the spot without reviewing it and consulting with your financial advisor first. 
  • If you are unsure, seek legal advice from a licensed financial advisor and let them take a look at the emails, texts, or any sales materials sent to you.

If you have been scammed and the money was transferred successfully, contact your bank as soon as possible and have the said transaction canceled or stopped. Your bank has the option to reverse the transaction. Change your password right away. Ask assistance from your local government on how and where to file a report. This is to raise awareness so that no one else gets scammed.


The most basic rule in investing is to spend what you can afford to lose because there is no such thing as low-risk, high return. Investing your money comes with a lot of risks. It pays to be cautious and skeptical when offered something over the top. You wouldn’t want to fall into the trap of these scammers.





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