6 Tips for Identify Investment Frauds – 2024 Guide


We live in a world where everyone’s chasing money left and right, and that kind of mindset allows some shady people to do some shady stuff like investment frauds.

Over the last several years, we’ve witnessed a lot more investment scams than ever. Shady people are praying on desperate people who have lost their jobs in the midst of the global health crisis by offering them what they need the most – easy money.

To help you avoid falling victim to investment fraud, we’ve decided to give you a few tips on how to spot one. So, without further ado – let’s get right to them.

The Basic Rule Of Investing


If investing were easy – everyone would be Warren Buffet. But, seeing how none of us are Warren Buffet, we feel like it’s safe to say that investing isn’t easy and that there is no such thing as easy, fast money.

The thing about investments is that they’re risky. Some are riskier than others, but they all carry some level of risk. However, there is another potion of the investment, and that’s the portion we usually get drawn to, and that’s called reward.

Risk and reward go hand in hand, and they’re usually on the same side of the spectrum. So, high risk – high reward, low risk – low reward, kind of deal. Low risk – high reward investments don’t really exist, or at least they don’t come around very often.

Once you wrap your mind around this one – you’ll have no problem spotting a scam.

Now that we’ve covered the main rule of investing, let’s talk about how you can easily spot an investment fraud.

1. Be Wary Low Risk – High Reward Investments


The first tip we have for you is to be wary of the “too good to be true” deals, or in this case, low risk – high reward deals. Like we said just a second ago, these kinds of investments almost never come around, and if you encounter an opportunity like that – take it with a pinch of salt.

Scammers will always try to lure in potential investors by promising them a safe deal with astronomical yields and rewards, and people will fall for it. You don’t have to be one of those. Now, we’re not saying that every investment opportunity such as this one is a fraud, but since most of them are – we’d advise you to be careful and do the following.

2. Do The Necessary Research

Luckily, we live in a golden age of the internet, and if there’s ever a problem you need help with – the internet can probably help. In this case, doing some research online can save you from “investing” your money into the pockets of a scammer.

Websites like Trustpilot and the ones like him contain a bunch of reviews on pretty much every single thing in existence, and if you notice that your investment opportunity has a lot of negative feedback – stay away from it.

Furthermore, if you don’t try the online community, you can always consult with an investing expert like the one you could find at mdf-law. Guys like these have had their fair share of experiences in the investing world, and if they can’t advise you to make the right decision – no one will.

3. Don’t Fall For The Pressure Tactics


Scammers have an arsenal of weapons to lure you in, and one of their most trusted ones is pressure tactics. They will use pressure tactics to create a sense of urgency to get you to invest early without thinking things through.

Now, these tactics can vary quite a lot. Scammers will either offer you limited offers or timed coupons, gifts or rebates, or they’ll just pressure you with early access benefits or something along those lines, so, if you stumble upon an “investment opportunity” with a banner that reads “Limited time only! Invest now and get rich quick!” – just walk away. Nothing good will come out of it.

4. Stay Away From Referral Bonuses


One of the most obvious tell-tale signs that you’re dealing with an investment fraud similar to a Ponzi scheme are referral bonuses and commissions. Ninety-nine times out of a hundred, a genuine investment opportunity won’t require you to bring in new investors, nor will you get any kind of commission, bonus or a percentage of their earnings if you do. Only investment frauds will have you do this.

Therefore, if you’re ever in a position where an opportunity is presented to you, and the only thing you have to do is invest, but bring more people on – just leave. Even though these things can sometimes be lucrative – it is only a matter of time before it all comes crashing down. And, the sad truth is – you rarely ever leave before it all comes crashing down.

5. Stay Away From Internet Financial Gurus


If you’re considering taking financial advice from someone filming reels on Instagram, you really shouldn’t be investing. If those people were really making money off of investments, they wouldn’t have the need to recruit you or give you financial advice. That’s just the way it is.

So, if you happen to stumble upon someone inviting you to invest in the “next big thing”, – just don’t. No one ever has gotten rich that way, and we’re pretty confident you won’t be the first one.

6. Check The Credentials

Finally, you’ll have to check whether you’re dealing with an investment that’s regulated by the relevant authorities. Most fraudulent opportunities are not, so before you go and invest your money into an opportunity, check and see whether they’re regulated or not.

Also, make sure you really check their credentials. Most of the time, these scammers will boast about “customer satisfaction”, “years of experience”, and so on. All of that can be easily checked – so do it. Don’t just blindly walk into something that could cost you dearly.



There you have it. Those were our six tips on how to spot an investment fraud and make sure you never fall victim to one. Hopefully, you’ve found this helpful.