Investment Fraud Overview

Investment Fraud Overview Related Information:

An increasing number of people, in the United States, are losing their hard earned money and sometimes their entire life savings, to fraudsters and swindlers, through investment fraud.

Have you invested some money in a company, which promised you a high growth of your capital, only to later discover that the company has suddenly disappeared and so has your money?

Did you put money into some telemarketing scheme, which assured you high interest on your investment, only to never receive any interest at all, and even ended up losing your initial investment?

If you are one of the many unfortunate people, who fall in the above categories, you have cleverly been duped and have been victimized by investment fraud.

Types Of Investment Fraud

There are so many different kinds of investment frauds surfacing every day, that it has become difficult to keep track and list all the various types. Here are some of the more common types of investment fraud.

• Fraud by Investment Brokers: Investing in securities, bonds, mutual funds, stock etc has become a preferred way of investment for a majority of Americans. An estimated one in three Americans has some or the other type of investment in such securities. To invest in the stock market, mutual funds etc, most people look to investment brokers. While there are a lot of honest and genuine brokers out there, there are quite a few dishonest ones as well. Many brokers use their clients’ funds to speculate or for their own investment needs. This can lead to heavy losses for the investor and at times even wipe out their entire portfolio. Such types of dishonest and fraudulent activities by brokers can leave you as a victim of investment fraud.

• African Fraud Schemes: Have you ever come across those e-mail messages from someone in an African country trying to enlist your help in releasing large amounts of blocked funds, and agreeing to share a percentage of such funds with you? Such schemes always entail an initial expenditure by the ‘victim’ to pay for legalities in getting the funds released. Although a majority of people know these scams for what they are, there are a lot who don’t. People have actually lost millions of dollars of their personal as well as their firm’s money in such scams.

The above are just two of the many examples of investment fraud. There are many other types of investment fraud, such as telemarketing scams, bond frauds, internet investment fraud, postal scheme fraud, churning scams, etc that have led to thousands of Americans losing millions of dollars to investment fraud, each year.

Avoiding Investment Fraud

People perpetrating investment fraud usually target senior citizens and older people. Firstly, because they often have considerable savings to invest in such schemes; and secondly because they seem to be more gullible than younger people.

Investment fraud schemes usually offer you large growth in capital, much higher rates of interest on your investment, or both. Such schemes typically have some time frame in which they must be invested in, or else you lose your chance to make good money.

If any kind of investment scheme sounds too good to be true, it probably is, and you should be suspicious of such investment arenas. If someone claims to give you very high returns on your money, for very little or no risk, you should investigate such claims before putting your money into these schemes.

‘Look before you leap’ or in the case of investments, ‘Inspect before you invest’ is the only way to avoid becoming a victim of investment fraud.