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Types of Investment Scams

Home > Avoid Fraud > Types of Investment Scams

Many modern-day scams have the hallmarks of classic frauds, but with a new twist. Check out this list of common and more recent investment scams to learn the key warning signs and understand how fraudsters work.

Multi-Level Marketing Investment Scams

This tactic is often used alongside crypto, forex, or stock trading schemes to lure people into fraudulent investments.

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Messaging App Scam

Scammers are using messaging apps like WhatsApp, Telegram, and Signal to carry out investment fraud.

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AI-related Scam

Bad actors are using the popularity and complexity of artificial intelligence (AI) to lure victims into investment scams.

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Investment Fraud via Social Media

Social media gives us opportunities to connect with others, share content, and be entertained. It also creates opportunities for fraudsters to promote their schemes.

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Gold Scam

Why precious metal scams rise during financial market downturns.

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Crypto Asset-related Scam

Fraudsters use the popularity and complexity of crypto assets to lure investors into scams.

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Approval Phishing

This tactic is often used in long cons, along with social manipulation and financial grooming, to lure victims into handing over ever-increasing amounts to scammers.

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Ponzi Scheme

In this scam, investors’ money is used to pay out returns to those drawn into the scheme to create the appearance of a profitable investment.

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Pig Butchering Scams

Before you take investment advice from a new “friend” or online love interest, get familiar with the red flags of pig butchering scams so that you can avoid becoming a victim.

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Pump & Dump Scheme

By spreading misleading information, fraudsters promote the purchase of a publicly traded stock to drive up its price, then sell it for a profit.

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Forex Scam

Fraudsters offer an opportunity to invest in foreign exchange, but in the end, the money is lost to those running the scheme.

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Offshore Investment Scheme

These schemes come in many forms, but one common characteristic runs through them all: the promoters want you to send money out of the country.

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Real Estate Scheme

Sold as short-term loans to buyers, construction loans to companies, or even shares in a building that will earn income for investors.

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Binary Options Scheme

A type of wager where investors bet on the performance of an underlying asset, usually in a short period of time.

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Boiler Room Scheme

Using high-pressure sales tactics, fraudsters cold call potential investors and persuade them to buy.

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High-Yield Investment Program (HYIPs)

Fraudulent investments that offer extremely high rates of return.

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Romance Scam

Scammers lure victims into false or misleading relationships, often with the intention to steal money or commit other types of fraud.

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Promissory Note Scheme

Watch out for promissory notes that guarantee above-average, fixed interest rates.

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Prime Bank Scheme

These tend to offer the purchase of debt obligations guaranteed by the world’s top banks, which are usually offshore.

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Oil & Gas Scheme

Scam artists take advantage of oil and gas booms by enticing investors unfamiliar with risks related to oil and gas ventures.

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Recovery Room Scheme

Scam victims are targeted again.

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Retirement Savings “Unlocking” Scheme

The common feature of these schemes is the promise that you can immediately access a portion of the cash value of your locked-in retirement savings account or income plan without paying taxes.

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COVID-19 Scams

Fraudsters take advantage of global events and breaking news to target potential victims.

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Crypto Quiz

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