If an investment or offer sounds too good to be true, it probably is. The following common scams should always be avoided.
Often aimed at senior citizens, promissory notes seem to be the perfect investment. They offer low risk with high interest, but this is all a fraud. There is no investment involved.
A private loan is risky because there is no way to know the character of the person who borrowed the money. Even if there are positive reports, they are often fake.
Investors find currency scams attractive because they are complicated and exotic with the possibility of very high returns. This is a favored scam of many criminals.
Precious Metal Investment
This scam operates on different levels. The bullion may be non-existent, and the people running the scam assume the investor will never look into the storage company. Another angle is selling interest in a non-producing mine.
Also known as viaticals, life settlements seem like a great investment on the surface, but all they do is hold money hostage, sometimes for decades. People are living longer, which makes this scam a terrible deal for seniors.
Clever criminals love this scam because copying the documents needed for unregistered securities is so easy. The next step is to get people to invest in companies that do not exist. Financial documents may look real enough, but that does not mean they are legitimate.
Prime Bank Scams
People respond strongly to opportunities perceived to be exclusive, and that is how the prime bank scams work. By thinking that they are privy to investments usually reserved for the super wealthy, people are quick to turn their money over, only to discover that the investment was a fraud.
Investment seminars can be fronts for “get rich quick” strategies, which often do not work for the average person. This scam is easy to avoid by applying common sense. If the scheme is so great, there is no reason for it to be widely shared.
Annuities are not always a bad investment, but they become a scam when unscrupulous advisors replace good products with low-quality products to obtain a new generation of commissions from assets.
Investing always carries risk. Scams can be avoided by doing research and being vigilant.
—–DAVENPORT LAROCHE, Alternative Investing Opportunities in Hong Kong