Investment Fraud FAQs
- What are some of the characteristics of investment fraud?
- What are different types of investment frauds?
1. What are some of the characteristics of investment fraud?
Some characteristics of investment fraud include:
- The use of high-pressured sales tactics,
Some swindlers may result to insulting or arguing with you if they sense you will not be an "easy-sell", shifting to a "hard-sell" approach.
- A request for credit card information other than to make a purchase,
Be careful about providing personal and credit card information for "identification" purposes. Unwanted charges may appear on your credit card bill without your knowledge.
- An offer that sounds too good to be true, and
Be wary of investment schemes that promise significant returns. As the age-old saying goes, "If it is too good to be true, then it probably is".
- A "demand" for an immediate decision.
Fraudsters are very persuasive and always have an answer that may sound reasonable to you. Never let a swindler pressure you to make a hasty decision.
For more in-depth information about the characteristics of investment fraud read NFA's brochure, Scams and Swindles: An Educational Guide to Avoiding Investment Fraud.
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2. What are different types of investment frauds?
Here is a list of some common types of frauds that investors should be aware of:
- Ponzi schemes or pyramid schemes
- Internet stock tips
- Seasonal trading in gas and oil
- Affinity fraud
For more information about these different types of investment fraud read NFA's brochure, Scams and Swindles: An Educational Guide to Avoiding Investment Fraud.
For a detailed list of specific industry related frauds, such as foreign currency (forex), weather-related and precious metals scams, visit the CFTC's fraud advisories list.
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