Investment scams are extremely common now, and even if you are not typically the easily persuadable type you could fall for one of these sophisticated scams. While some groups may be targeted more than others, everyone on the Internet is at risk. Let’s take a look at some major characteristics of an investment scam.

Four characteristics of an investment scam

1. Unsolicited email or mail- If you didn’t ask for that  investment brochure in the mail or that message in your inbox, that should be your first warning that this could be an investment scam. Most investment scams occur when the scammers come looking for someone to prey upon, not when the prospective investor searches for an investment.
2. Unrealistic guarantees- It is just like the old saying goes “If it sounds to good to be true it probably is.” This fits very well in the investment industry, since there is no sure thing and any kind of ridiculous expectations or guarantees are a classic sign of an investment scam. Keep your expectations in the realistic category!
3. Pyramid schemes- At the first sign of a pyramid scheme you should run the other way, quickly. Pyramid schemes often claim a small investment will turn into a huge profit in small amount of time. These are multi level marketing pyramid schemes that payoff the people who start it, but almost everyone else simply gets scammed out of their money.
4. Offshore accounts- One of the classic investment scams is that of someone requesting money be sent to an offshore account for investment advice or some kind of great investment program. These offshore investment scams are all over the place and should be avoided at all costs. Sending money to an offshore account hoping for big profits is a major mistake.

The wise consumer should be able to avoid investment scams, but you have to recognize these investment scam red flags before you it is too late!