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How do investment scams happen?
Once a relationship has been established and trust is created, newinvestingopportunities are presented.
Are you worried about being targeted?
Here are six investmentscam red flags and how to avoid getting caught by them.
hey remember that dealing with unlicensed professionals is fraught with danger, McGlynn said.
I advise people to verify the credentials of the person offering the investment.
Investment scams always promise high, unrealistic returns with little or no risk, McGlynn said.
I advise you to be skeptical of any investment that guarantees magnificent returns or sounds too attractive.
According to McGlynn, scammers always exert pressure on the target to act immediately.
The objective is to get you to invest immediately without thinking it through.
If its the latter, that might be a sign that the opportunity is not legitimate.
Generally, investment scam offers come out of the blue without you seeking any information, McGlynn said.
These messages or invitations come through cold calls or emails.
That should alert you to remain cautious.
I suggest ignoring such calls or emails.
Real investment opportunities are transparent in how they operate from start to finish.
Be wary of anyone claiming to have a secret investment thats not available to the general public.
Its likely illegal or may not even exist, said Yehuda Tropper, co-founder ofBeca Life.
McGlynn said that the golden rule to investing is understanding how the process works for yourself.
They are designed that way, as it makes them harder to trace.
Any reputable advisor should be upfront about their compensation and any associated costs, Tropper said.
Its a red flag if they avoid the question.
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