Investment Scams

High Risk Financial Investment Scams

If a website offers you "risk-free prosperity", "financial freedom" and "secure profit" there is a serious chance that the company is a scam. The very simple truth is that there is no company that can promise you a high return with no risk. Each investment carries with it a certain level of risk. If this would not be the case, everybody would be investing in it. Smart about Money created the visual below mapping the level of risk with the kind of investment product.

How to check an Investment or Trading Company

Before you make the decision to invest, do the following checks:

  • What is the company trading/investing in: high return investments are usually high risk. Typical high risk investment products are cryptocurrency, oil, gold, foreign currencies, hedge funds, etcetera. If the company does not list clearly in which assets it is investing or trading, do not invest.
  • What is the chance you lose money: experienced trading and investment companies know what the chances are that you will lose (all) your money. For CFD's the estimates are that 70 to 80% of all private investors lose (all) their investments. If the company cannot state the likelihood of losing money, do not invest.
  • Don't trust welcome bonuses: Many scammers offer investors a "welcome bonus". The scam trick is that you cannot take your money out of the scheme or, to get the bonus, you first have to pay. It is easy for them to offer a bonus, knowing you will never get your money. If they are unclear about the conditions for the welcome bonus, do not invest.
  • Is the company certified: In most countries, investment and trading companies have to be certified or licensed in order to offer their services. Do not trust the "proof" provided on the company website itself. On Scamadviser you can find a list of country authorities that license investment and trading companies. If they are not on the list, do not invest.

Finally, we recommend you to do your homework. Use our checklist "How to recognize a Scam". It may also be worthwhile to read our articles about "High Risk Asset Trading: Forex, CFD, Gold, Oil and More" and "What are High Yield Investment Programs (HYIPs)".


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