Is your investment too good to be true? How to steer clear of scams

If an investment opportunity feels too good to be true, then it probably is.

The Better Business Bureau warns that investments are no exception to this rule.

“Do all that research before you invest in a company and do business with them, especially if this company is guaranteeing you something,” said Bryan Oglesby of the Better Business Bureau. “No legitimate company is going to offer a guarantee.”

Oglesby explained that a guaranteed return is a significant red flag, often signaling an investment scam. Another warning sign is a sense of urgency.

“Over 80% of people that fall victim to this scam do lose money,” said Oglesby, “so it’s a very high-risk scam, and a lot of consumers are losing thousands of dollars.”

These scams have become sophisticated, often involving fake websites that falsely show investment growth and returns.

“A lot of these look like your money’s growing because they’ve created a fake website,” said Oglesby. “They have a platform that shows that the money is growing, and you’re getting returns on those investments.”

The goal is to build trust over time. Scammers do this sometimes over weeks, months or even years until you attempt to cash out and find you cannot.

“They’re even now using AI as a technology to help make their scams more legitimate,” said Oglesby.

Cryptocurrency is also being used by scammers to lure unsuspecting people in.

“A lot of people do not understand how cryptocurrency works,” said Oglesby. “They think it’s the latest thing to get in on. They hear from a potential friend, especially on social media, but a lot of times, those accounts have been hacked.”

Scammers may also reach out through third-party apps, so it’s crucial not to respond to any unsolicited messages.

To protect yourself, always conduct thorough research to verify the information provided.

The Financial Industry Regulatory Authority (FINRA) is a good place to start, as every financial advisor or investor must register with them.

The Better Business Bureau’s website is another valuable resource.