The introduction of the internet into the business world was surely a great innovation for investors as they can now easily research different types of investment opportunities around the world and trade securities. As a result of the internet not having regulations, fraudsters have found a place where they easily deceive people who intend to make their money work for them by investing. Usually it begins by a phone call or an email presenting you a business opportunity one can only dream of, as you begin to accept the investment opportunity which you believe is going to turn your life around. You start pouring in dollar upon dollar and might even find yourself in debt only to later notice the investment was just a mirage.
The point is that the investment scam is so well planned that differentiating it not to be a real investment opportunity is impossible. An investment scam can as well be presented to you by someone who you have known for a while and who have gained your trust, and can take one of the following three forms; the presented investment opportunity is fictitious and is non-existent; the presented investment do exist but the money you will give to the fraudster does not go into the investment rather to his bank account; the scam could as well be a group of individuals falsely presenting themselves as an investment company.
Types of investment opportunities that turn to scam
A scam usually turns to work well as those involved in the scam are well prepared and organized. A huge scam like an investment opportunity always involves a team of individuals who come up with a makeshift office, known as a “boiler room”. They pull the package by directing the victim to the company’s website given the conviction to the victim that he is handing his money to people who can multiply it in a good way. In order to play big and make the company look legitimate, they will set-up a number which is accessed toll free and even give the victim the address of the company to make him not to panic and have any thought in the event of making investment decisions. Not to forget that the information given by the scam team all along about the existence of this nice looking investment opportunity in their company is fake and if later the victim is to trace the office he might end up meeting a tree at the exact location that was for the company. Below are some of the most common investment opportunity scams
The idea behind an advanced fee scheme is that the scammer puts in effort to encourage to pay money up front against an investment opportunity making the investor believe he is going to have a large return on his investment. Once the money gets into the possession of the scammer the investor doesn’t hear from him again.
Another scenario of an advanced fee scheme occurs when the scammers target an investor that just lost money in a risky investment and propose to him the opportunity of them trying to recover some of the money he lost. The idea they will bring to this investor is to buy or exchange the risky investment and make more profit from it than it is worth. The investor becomes a victim of an investment fraud once more as he is asked to first pay a fee or tax on the service which is refundable in case of failure.
- Scam On Exempt Securities
In Canada for example when a company is to sell securities, the company has to file to the with security regulators a document that describes its various ventures (prospectus). Looking at exempt securities, this condition is not necessary. Knowing this, some scammers will present their fraudulent investment opportunity as an “exempt” security. This will begin with an urgent call telling you about a promising investment opportunity which will soon go public, you will be normally told that the investment opportunity is at the reach of only rich people but for you there be an exemption.
The forex scam is mostly an online scam and forex stands for the foreign exchange market and is the largest world market for liquid finance. The Forex ads is the way to access the foreign exchange market, this market is characterized by well-resourced, large international banks with a well trained staff that knows how to use the latest technology in accounting. Scammers take advantage that their Forex services is an online business based in another country, some firms market their services not following the rules and their money get lost.
Internet business scams
The expansion and flourishing of business thanks to the internet through online businesses have only found an increasing trend. Growing parallel to the online business is the online business scams which continuously spread like wild fire, which are known to have taken advantage of several people. Opportunities in online business like investing for beginners and starting your own online business are some of the ways the scammers use to give impression to this beginner they have the perfect plan to make them get rich as quick as possible. Two emotional triggers greed and fear are played on by the scammers. Greed in the sense that most investment beginners seek to get rich fast and fear is to describe the search of financial security such that the more you make money fast the less you will worry about it in future. Some of the most popular online business scams or work-at home scams are cited below;
- Chain letters or chain emails
This scheme is used by scammers to target any person with and it is shown to be a very simple task online business. This requires you to forward an email you received to a list of email addresses and some cash to the names at the top of the list. The chain email will as well instruct you to add your name at the bottom of the list as you pass it on and that with time you will start receiving money without actually doing anything. This is an example of a pyramid scheme seeking to take advantage of individuals who do not have any suspicion.
Craft assembly business involves the assemblage of toys among which we can cite crafts, dolls and any other type of assemblage project. In this scam you will receive instructions from a company through email that tells you about the craft assemblage business and promises a large profit at the end of the day and you think you have found a good online business. The only thing left for you to do is to pay an upfront fee (the scam) which is for the starter kit in which you will find the parts and instructions on how to move on with the assemblage. Thereafter when you are done with the craft assembly and sent it back to the company expecting your payment you are then told that the work you did was not up to standard and cannot be paid for. This is how the scam is designed so that no one will ever meet their required specification of design.
The email processing scam is the type of scheme which the scammer makes you think you are doing a very profitable online business just by processing emails. You are asked by the scammer to pay an upfront fee to be able to have access to the services of getting the emails at your disposal at your home for processing. This work is nothing more than luring the web to process and spamming the same massage the scammer sent to you to other persons through email.
There are many companies that come up online through your mail or through publicities on certain websites and make you believe you can make a lot of money just by typing. This is mostly set to target those who are good at typing fast, stay at home moms and those who are always online. There is a condition to start the typist work which is to pay an upfront fee (the scam) that will permit you to have the computer disk with the steps that are going to help you place ads for other typing positions online. They will persuade you that doing this will enable you create an online business where other typist who want to join the online typing business have to obtain the disk from you. This practice turns you to bring more people into the network, this is an example of a pyramid scheme and it is illegal.
Investing for beginners
There are a number of practices that should ring a bell to someone who is to get involved into investing for the first time most especially overseas because most investment opportunities that turn to scams in investing for beginners is that they should finance a business overseas that has a greater return there and they are going to make quick and large profit returns on the cash invested.
Other common types of scam
Cold calls encouraging you to invest
Investment opportunities here are announced to you by an individual who will tell you that he is a stock broker or a portfolio manager. The investing for beginner’s opportunity they will tell you they have is a low risk one and as a consequence of your investment you will have high returns. The scammer will do everything such that his deal seems legitimate and in case you do not respond he will keep calling you. They usually claim they do not need the a License to operate and are approved by the governments where they operate. The areas proposed for investment for beginners in this scheme by the scammer are into mortgage, real-estate, option trading and currency trading which all will have a high return over a short run.
Share portion and hot tips
In such a scam a good investment opportunity is presented to an individual who want to make more money without him actually making much efforts. You will be informed that there is a company whose share are being expected to raise in the nearest future. The means by which you can be reached for such an investment opportunity is through email or the information will be posted in a forum. The scammer in this case initially purchased this share and on realizing it is not a fruitful venture targets those he knows are beginners in investment and promotes the company image and even sells the none-fruitful shares he purchased at an even higher price to his victim. The share may loss its value and hence might worth much less than the amount the investor purchased.
These are seminars which are destined to motivate the investing for beginners into the business world. It is held by investment experts, speakers who can motivate the investment of beginners. They will encourage these beginners to go on and follow high risk businesses and will give them tips on doing by advising them to borrow money in large amounts to purchase property. The way in which money is extracted from the beginner in investment is through the seminar promoter who will first of all ask them to pay charges in order to attain these seminars and there after sell them business books at very expensive prices and at the end the person gets no one to one advise on investing for beginners.
Investment scam from investment companies
Explaining the concept of investment companies scam, the scam here is the inappropriate achievement of foreign technology by the investment companies from countries like USA, Canada, Europe or Australia. This begins with an innovative technological idea being developed from one of these countries and in order to make this technology a business opportunity this inventor contacts a manufacturer so that it will function as an investment company for the production of the item invented. The normal trend is that the innovator enters into a predevelopment relationship with the company. As this contract goes on, the company convinces you to hand over the complete technology to them since you guys are now in a partnership and that immediate interest is not their objective but the interest at the end of the IPO. So they take on them all the cost of production as you give them the full technology.
After the production is complete and you to enter the manufacturer agreement you then discover the investment company has scammed you by putting both the invention and production of the technology in their name which is all legal to their local authority hence they cannot be sued.