How can I check whether an investment offer is a scam?

No single test settles it. The checks that catch most frauds are these: find the firm on the financial regulator’s register in your country and use the contact details given there, not the ones you were sent; treat a guaranteed return, pressure to decide, an unusual way of paying and any fee to withdraw as warning signs; and talk it over with someone who has nothing to gain from your decision.

What are the most common warning signs of investment fraud?

A return that is guaranteed or far above what banks pay; contact you did not ask for; pressure to act today; payment in crypto-assets, gift cards or to a private account; a request for remote access, a password or a one-time code; being told to keep it from your bank or family; and a charge that must be paid before you can withdraw your own money.

What should I do if I think I have been scammed?

In general terms: stop paying, keep every record, tell your bank or payment provider at once using a number you find yourself, and report it to the police or fraud-reporting service and the financial regulator in your country. Be ready for a second approach from people offering to recover the money for a fee.

How frauds work

Scam school

12 short pages on how the common investment frauds work: the steps, why each is convincing, the signs, and a moving picture of the mechanism. And one list of questions to put to any offer.

Check an offer The 12 frauds

Where the money comes from

Four schemes that pay out other people’s money.

Each looks like an investment. In each, the only money in the room is what the investors brought with them.

The Ponzi schemeReturns paid to earlier investors from the money of later ones.
The pyramid schemePaid for recruiting, until there is nobody left to recruit.
Pump and dumpA price pushed up with hype, and sold to the people who believed it.
Signal sellers and “guaranteed returns”A perfect record, made by sending both predictions and keeping the half that worked.

Borrowed trust

Four ways of looking like someone you can rely on.

A real firm’s name, a convincing screen, a helpful expert, a friend. The trust is real. What it is attached to is not.

The approach

Four ways the first message arrives.

A call about money already lost, a warning about your account, a sum waiting to be released, a famous face.

If it has happened

What people do next, in general terms.

The same steps apply to nearly every fraud on these pages. They are general information, not legal advice: the rules, and who to report to, depend on the country you are in.

Nobody can promise that money lost to fraud will come back. Sometimes some of it does; often it does not. Anyone who guarantees a recovery, or asks to be paid first, is describing another fraud.

Regulators publish free warning lists and registers of authorised firms. This site lists several under Nice & Need: stay safe. To check an address that claims to be this site, use Verify a GIO4X link.

Stop paying.Send nothing more, whatever the reason given: a tax, a fee, a deposit to “unlock” the account, a charge to recover what was lost. A further payment is the usual next step of the fraud.
Stop the conversation.There is no need to explain, argue or warn. Do not delete it, either: it is a record.
Keep records.Messages, names and numbers used, the addresses of websites, payment receipts, account and wallet details, screenshots of anything that might disappear. Note the dates.
Tell your bank or payment provider at once.Use a number you find yourself, on a card or a statement, not one from a message. Say it is fraud. Time matters, and they will say what they can and cannot do.
Report it to the authority in your country.That is usually the police or a national fraud-reporting service, and the financial regulator. A report helps others even where it does not help you.
Secure what was shared.Change passwords that were given out or reused, remove any remote-access software that was installed, and tell the provider of any account or card whose details were passed on.
Expect a second approach.People who have lost money are contacted again, by “recovery agents”, “lawyers” and “officials” who ask for a fee first. See the page on recovery-room fraud.
Tell someone you trust.These frauds are built by people who do it for a living, and they work on careful, intelligent people. Silence helps only the fraudster.

Questions people ask

Short answers.

How can I check whether an investment offer is a scam?: No single test settles it. The checks that catch most frauds are these: find the firm on the financial regulator’s register in your country and use the contact details given there, not the ones you were sent; treat a guaranteed return, pressure to decide, an unusual way of paying and any fee to withdraw as warning signs; and talk it over with someone who has nothing to gain from your decision.
What are the most common warning signs of investment fraud?: A return that is guaranteed or far above what banks pay; contact you did not ask for; pressure to act today; payment in crypto-assets, gift cards or to a private account; a request for remote access, a password or a one-time code; being told to keep it from your bank or family; and a charge that must be paid before you can withdraw your own money.
What should I do if I think I have been scammed?: In general terms: stop paying, keep every record, tell your bank or payment provider at once using a number you find yourself, and report it to the police or fraud-reporting service and the financial regulator in your country. Be ready for a second approach from people offering to recover the money for a fee.
Can money lost to an investment scam be recovered?: Nobody can promise that money lost to fraud will come back. Sometimes some of it does; often it does not. Anyone who guarantees a recovery, or asks to be paid first, is describing another fraud.

These pages describe types of fraud for study. They name no real firm, person, website or product, and retell no real case. They are not legal advice and not a judgement on any offer you may have received.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

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Scam school

14 questions to put to any offer.

Four schemes that pay out other people’s money.

Four ways of looking like someone you can rely on.

Four ways the first message arrives.

What people do next, in general terms.

Short answers.

Scam school

14 questions to put to any offer.

Four schemes that pay out other people’s money.

Four ways of looking like someone you can rely on.

Four ways the first message arrives.

What people do next, in general terms.

Short answers.