It’s a disastrous story that happens way too often. You look cautiously for somewhere to invest your carefully accumulated savings, or possibly an inheritance or a gift. It’s a nest egg, and you feel it represents a good part of your long-term financial security. You search around, talk to people, and find what you think is an excellent opportunity offering a projected 15%-17% return but with low risk.
For the first year or two everything seems great. Until you stop hearing from the financial marketers, who also don’t seem to answer the phone anymore. Then you read an investigative article about the company in the business press which states that they are suspected of investment fraud. And from that point onwards, it’s a downward spiral of bad news whereby the only thing not clear to you is whether you’ll lose everything, or manage to recover a part of your “safe” investment.
Unfortunately this scenario repeats itself day in and day out in Israel and around the world.
So the following are some of the major warning signs of investment fraud that every investor needs to be aware of.
- Don’t judge a book by its cover. People running scams will go to extreme lengths to ensure that their image looks reliable in order to gain people’s trust. But just because they look solid and reliable doesn’t mean they are. Do thorough background checks before investing your money anywhere, especially if you are transferring the money to them as opposed to keeping your investments in your account.