Lesson 4 of 4 · 2 minute read
How to spot investment scams
The warning signs that an "opportunity" is really a scam, and what to do.
Investment scams can look real, with nice websites, videos, and stories of people getting rich. They take a lot of money from people every year. These warning signs can help protect you.
Red flags
- “Guaranteed” high returns with little or no risk. Every real investment has some risk. Words like “risk-free” and “guaranteed profit” are big warning signs.
- Pressure to act fast. “Only a few spots left.” “This deal ends today.” Scammers rush you so you don’t have time to check.
- They contacted you first. A message out of the blue, a wrong-number text, or a new friend online who brings up investing.
- Crypto “mentors” and coaches. Someone offers to teach you to trade or to manage crypto for you, often after building a friendship.
- Fees to get your money out. If you’re told to pay “taxes” or “fees” before you can withdraw your profits, it’s a scam.
- Everyone’s doing it. Scammers often target groups, like churches or communities, and use people you trust to spread the word.
Protect yourself
- Take your time. A real opportunity will still be there tomorrow.
- Check whether the person or company is registered at Investor.gov.
- Never send money in crypto, gift cards, or wire transfers to someone you only know online.
- Talk it over with someone you trust.
If you’ve been scammed
It’s not your fault. Scammers are skilled at fooling people. Report it to the FTC at ReportFraud.ftc.gov. Be careful of anyone who promises to get your money back for a fee. That’s often another scam.
Be careful if someone promises big returns with no risk. Every real investment has some risk. That promise is the biggest red flag.
Scammers rush you so you can't check. They often contact you first, like a stranger online or a wrong-number text.
Watch out for crypto coaches and new online friends who bring up investing. If you must pay fees to get your money out, it's a scam.
Take your time. Check if the person is registered on Investor.gov. Never send crypto, gift cards, or wire transfers to someone you only know online.
If you were scammed, it's not your fault. Report it to the FTC. Be careful of anyone who wants a fee to get your money back.