Money & Policy

Be Wary of Pitches to Invest Now for High Profit at Low Risk

The higher the promised return, the higher the risk

Be skeptical of any investment pitch that insists you act now, that guarantees big profits, that promises little or no financial risk or that demands you send cash immediately.

The Bait

It’s not unusual to see messages touting investments that promise high rates of return with little or no risk. Many versions seek investors to help form a new company or bank. Others are vague about the nature of the investment, but stress the rates of return. Promoters hype their high-level financial connections; the fact that they're privy to inside information; that they'll guarantee the investment; or that they'll buy it back. To close the deal, they often serve up phony statistics, misrepresent the significance of a current event, or stress the unique quality of their offer. And they'll almost always try to rush you into a decision.

The Catch

Many schemes you hear about are a good investment for the promoters but not for investor. Promoters of fraudulent investments operate a particular scam for a short time, close down before they can be detected, and quickly spend the money they take in. Often, they reopen under another name, selling another investment scam.

What You Can Do

Take your time in evaluating the legitimacy of any investment offer: The higher the promised return, the higher the risk. Don't let a promoter pressure you into committing to an investment before you are certain it's legitimate. Hire your own attorney or an accountant to take a look at any investment offer.

Report Online Scams

If you believe you’ve responded to an online scam, file a complaint with:

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