Investment Scheme Fraud- It is Too Good To Be True?

Link to us: http://snipr.com/u5mhg

Work like a mad but still earn the same amount of money? What is the easy way to make your money grow faster? Instead of working to earn money and do saving, most of the people will think of doing INVESTMENT where they ‘make the money works'. Nowadays, investors can even invest their money and properties online. It is far more convenient. There are plenty of investment schemes available such as the Get Rich Schemes or what Malaysians used to call it as Skim Cepat Kaya. However, not all online investment schemes are reliable. Some are SCAMS instead of schemes. Those cunning scammers out there in the web are scheming to come out with wonderful investment ‘schemes’ to trap the investors. There are many types of online investment scams and the popular ones are like Ponzi Scheme and Pyramid Scheme.

Image taken from: http://silvertailsystems.files.wordpress.com/2009/11/free-money.jpg

Do you remember the cartoon "Tom&Jerry"? Lets take it as a parable...

Tom, the cat >>> the scammer

Jerry, the mouse >>> the investors (potential victim)

Mouse trap >>> the online investment scam

Cheese >>> the bogus investment promises

>>>: represents

Most of the online investment scams are like mouse traps. The scammer’s alluring bogus investment promises that promise a double or triple return of money is like a tempting cheese on the mouse trap waiting for Jerry (investors) to get trapped. However, not all investors are like the smart Jerry who is able to escape with the cheese (money). So, how to invest safely in the cyberspace? Here are some Don’t and Never in investing online:

1. Never believe in those investment schemes that look too good to be true!

“Experience a HIGH return with NO risk investment scheme in XXX Company!!” Is the headline appeal to you and make you feel like invest in XXX Company immediately? THINK TWICE!! Always ask yourself a question whenever you feel like invest in the online investment scheme or company: “Is that too good to be true?”

2. Don’t simply trust and act on the advices or testimonies of an anonymous person that hides his/her true identity in the online bulletin boards.
Online bulletin board is an electronic message center where most of them serve as specific interest groups. They allow you to dial in with a modem; review messages left by others, and leave your own message if you want. (http://www.webopedia.com/TERM/B/bulletin_board_system_BBS.html,2002) Nowadays, online bulletin board not only becomes a popular forum that allows interactions and sharing information among investors, it also becomes a place for scammers to hunt for their ‘preys’. As the online bulletin board allows people to leave message freely, hence, the scammers will act as though they are one of the experienced investors trying to give false testimony about how good a particular company is. Some even avoid revealing their identities. Most of the time, they are one of those insiders of the company itself.

3. Don’t ever think that all the online investment newsletters are trusty.
Is online investment newsletter more reliable than the online bulletin board? You might think that the information provided in the newsletter must be valid and credible as it is written by those professionals or experts in investment. Plus, there are facts together with researches. Even so, it’s a ‘no no’ to think in this way. Some of the online investment newsletter writers are paid by those companies to promote or so called ‘hard sell’ their investment schemes and companies. Well, it is legal to do so. However, it becomes illegal when the writers failed to reveal or lie on the amount of payments they receive from their employer (the particular company) and providing forge research. Those online investment newsletters might seem to have neutral views and information with the support of researches, yet, have you ever thought of those researches are merely false statements? Here, to find out more on tips of checking out newsletter.

4. Don’t forget to check and make sure that the person or the scheme that you intend to invest on is registered with your state securities agency.
From there you can be clear that with whom and in what you actually invest on. Then, only that you are able to make a wise decision on your investment.

Reference: U.S. Securities and Exchange Commision official website, Internet Fraud: How to Avoid Internet Investment Scams [Online], Retrieved 20th January 2010.

URL: http://www.sec.gov/investor/pubs/cyberfraud.htm

Lastly, never let your greed overpower your sense!

^^ErIcA^^