When you’re just getting started in investing, it’s easy to become a victim of investment fraud. This type of fraud is when someone tries to get you to invest money into a fraudulent account. There’s no real investment opportunity, and the money you’ve invested is instead in someone else’s bank account.
How do you avoid investment fraud?
The best way to avoid most forms of financial fraud or scams is to avoid sharing personal information online. You should always avoid sharing the following personal information through social media, through email or to anyone over the phone you don’t know:
- Bank account details
- Birth date
- Social Security number
- Answers to security questions
Often, if someone is asking for this information, they’re trying to scam you. Most trusted financial brokers and institutions wouldn’t ask for this information over the phone or through social media.
What are some other investment scams?
Generally, if someone is asking you to wire money to them directly, it’s a scam. Always verify where you would be sending the money to and the institution that this person is working for. Even startups will have a financial advisor or firm through which they solicit investors.
If you’re getting a lot of pressure from the person emailing or calling you to invest right then and there, that could be a red flag. Also, if you’re being promised an opportunity to double or triple your investment, be wary: Even the best broker doesn’t make promises they can’t keep.
What if you’ve been scammed?
Being a victim of financial fraud can be devastating. If you believe that you’ve been scammed, reach out to a lawyer as soon as possible to learn about your options.