THE FBI has a list of five investment scams that promise money but could actually cost you everything.
It features on the “Business and Investment” fraud section of the FBI website and it’s worth taking note.
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You may see any of the malicious schemes appearing in your email inbox or on social media.
Criminals also try cold calling and promising no-risk investments with big rewards.
If you spot any of the following scams, ignore them and report the message or call to the FTC.
ADVANCE FEE SCHEMES
The FBI says: “Advance fee frauds ask investors to pay a fee up front – in advance of receiving any proceeds, money, stock, or warrants – in order for the deal to go through.
“The advance payment may be described as a fee, tax, commission, or incidental expense that will be repaid later.”
In this situation, a scammer will likely keep your money and give you nothing in return.
If you hand over any financial information, they could also drain your funds.
NIGERIAN LETTER OR 419 SCHEMES
So-called 419 schemes get their name because the number refers to a section in Nigerian law that concerns con artists requesting victims transfer money to help them.
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This type of scam has been around for a long time but tends to happen electronically nowadays or over the phone.
The FBI says: “An individual may contact you, often through e-mail, explaining that he needs help transferring a large amount of money.
|He tells you that political turmoil or a recent natural disaster in his country has affected his ability to transfer the money on his own.
“If you help him, he will allow you to keep some of the funds for yourself.”
However, the scammer will keep all the money and your financial information if you let them.
You should never transfer money or give bank account information to strangers who message out of the blue.
PONZI SCHEMES
The FBI warns: “A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.
“Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk.”
Cybercriminals often promise a reward that’s too good to be true and a “guaranteed return” is just that.
It’s hard to guarantee you’ll see a return even in a legitimate investment situation, especially a large return.
PYRAMID SCHEMES
You may be contacted on social media to join a pyramid scheme.
Participants make their money by getting others to join the scheme and only the people at the top of the pyramid tend to make any money.
The FBI warns: “Pyramid scheme promoters may go to great lengths to make the program look like a business, such as a legitimate multi-level marketing (MLM) program.
“But the fraudsters use money paid by new recruits to pay off earlier stage investors (usually recruits as well).
“At some point, the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and people lose their money.”
TELEMARKETING FRAUD SCHEMES
Telemarketing happens over the phone and criminals will try several different methods to steal your money.
This ranges from telling you that you’ve won a prize to claiming you’re in legal trouble.
The FBI warns: “In some scams, they act friendly and helpful. In others, they might threaten or try to scare you.
“One thing you can count on is that a phone scammer will try to get your money or your personal information to commit identity theft. Don’t give it to them.”
