While every scam is different — and some are more convincing than others — there are some tell-tale signs to watch out for to help protect yourself.
Studies have found that the more certain you are that you will never be scammed, the more likely it is that it will happen. This can be because we become over-confident.
So what are the warning signs?
1 You’re contacted out of the blue. If someone calls, emails and writes to you unexpectedly, be wary. Scammers are on the hunt for victims, so are more likely to reach out and offer you a deal than a legitimate firm.
2 You’ve never heard of them. Alarm bells should ring even louder if it’s an unknown name. Make sure you do some research before handing over any money or details, and you can always double check the firm is legitimate on the Financial Conduct Authority register.
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If it is real, check the number and address are the same, and it’s worth calling their listed number to make sure the person who called you is actually from the company.
3 Worrying reviews. Check sites such as TrustPilot or Smart Money People to read about others’ experiences with the firm. The scammers might try to reason that it’s only people with a grudge who complain on these sites, but if anyone says they have lost money, steer clear.
4 The firm calls you everyday. Scammers try to build up trust over time to eventually con you out of more of your cash. Just because they are nice and haven’t pressured you to send money yet, doesn’t mean they won’t soon. It’s unlikely that a legitimate broker would suddenly start calling you every day.
5 Sudden returns. In most invetsment scams you will make a startling return not long after you have invested. This is to convince you to put more money in. Be wary. See what happens if you ask to cash in your profit. No reputable company would stop you doing this.
6 Telling you to lie to your bank. Banks will ask certain questions to figure out if you’ve been scammed as a way to protect you. The problem is, the scammers know these too. If the firm is telling you what to say to bank staff, or asking you to lie, it’s because they know the bank will realise you are being duped.
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7 And always remember the old chestnut that if it sounds too good to be true, it probably is. It’s hard to pull yourself away from tempting returns, but if a deal is promising profits that you struggle to find from legitimate companies, it’s probably not real. Run the deal past friends and family who can sense check it for you; if they agree it sounds extreme, walk away.
