Too Good to be True!
Use of Internet has penetrated our every way of life. We are totally dependent upon it from looking into our emails to making big financial decisions.
We don’t make any decision without the help of Internet. In fact, I would say we are too dependent on it. However, we can’t trust this platform so blindly. The information given there could be wrong and misleading.
This is something not new. There are thousands of investment scams on the Internet which are too good to be true.
To put it simply they are just a scam. You could not believe that so many people have been cheated online in the name of Investment.
Therefore, how do you make out whether the current scheme that you’re reading on Internet is a scam or a great investment opportunity?
Well! You can easily make out but you need to know different types of investment scams running on the Internet.
Different Types of Investment Scams on Internet
1. Ponzi Schemes
In Ponzi schemes, money that has come from a new investor is used to pay off the previous investors. In the end, whole scheme collapses.
On the Internet, the so-called company would ask you to pay some money and you get high returns. The returns that they will promise you is mind blowing.
Therefore, you have to be very careful if they are showing returns which are over the top because it could be a fraud.
There are hundreds of ponzy schemes still running in India & around the world & people still believe & invest in such schemes.
2. Pump and Dump Schemes
In pump and dump schemes promoters will boost the price of a stock with the help of misleading statements about the company and then they sell their own held stocks, dumping the shares into the markets.
On the internet, you will see advertisements to buy these stocks as soon as possible. So they first pump the price of a stock and then dump it.
Investors like you, are finally going to lose money. Hence, you must be aware of advertisements which are selling these type of stocks.
3. Pyramid Schemes
Pyramids schemes are also like ponzi schemes where they will ask you money and return would be 4 to 5 times higher.
They will also claim that they had legitimate products and services but they will not have anything. After taking your money they would spend them on themselves or they have to pay to people who invested earlier.
As the scheme gets too big and promoters do not have money to pay and they cannot raise enough money from new investors, the company plan to close the scheme or simply run away.
There are enough example in last 2-3 years to better understand these types of pyramid scheme. Some of the most famous are Saradha Group, Speak Asia, City Limousine, NMart, Pratibha Group, AllHitDeals, Stock Guru, AdMatrix, QNet & many..
4. Through Spam Emails
You might have noticed emails coming to you saying that you have just won a million dollar. To know more click the button down below.
If you click the button you will be taken to a page where they will tell you to fill a form and pay a small amount of cast to take your million dollar cash prize.
Well! It is totally fraud. Never, pay any amount of money. These fraudsters just collect money from people like you and in return they have nothing to give.
5. Fake Stock Brokers
As stock prices plunges some stock brokers indulge into fraud. You need to be careful before you buy stocks from these brokers.
On the Internet, it is much easy to sell stocks which are of no value. They could find people on Internet who are ready buy these stocks.
Hence, this is another type of scam on the Internet.
6. Get Rich Schemes
Last but not the least type of scam which is very common all over the internet is get rich scheme. According to advertisements (like this), you can make million dollars in just few months.
They are going to ask you to buy their program which can make you lacs if not millions. In reality, all those are frauds. Do not pay any money to buy their programs because it has nothing new to offer.
Almost every single of them are selling same program with different names. You are not going to get rich overnight or so quickly.
How to Avoid Investment Scams on Internet
Now how do you avoid falling into the trap?
1. Know Internet
First, you need to have elementary understanding of the Internet. Internet is not like a TV set where TV channels have some accountability.
On the Internet, there is no accountable. You need to know that it is an open platform and anyone from anywhere could contribute.
You should surf the net and find out more about it. Internet is a vast area and no one can become expert of it. Therefore, you need to know it before you use it.
2. Use Common Sense
Next thing to use is little bit of your common sense. Whenever you come across advertisements promising high returns for your investment or making you rich overnight, you should stop and ponder over it.
Is it possible that you will be rich in short period of time? Similarly if you receive emails which are promising million dollars then you have to stop and give a second thought.
If you use common sense you would realize this could not be true.
Read this online jobs scam article to know how to use your common sense.
3. Research and Enquiry
Before you are buying a stock or purchasing a stock paying though a credit card you must have done research about the company and it product thoroughly.
You should enquire on the given phone number before you make a purchase. Do not buy anything in haste on the Internet because most of the products are a fraud.
4. Overcome Greed
The ultimate thing that you’ve to overcome is your greed. People are duped only because of their greed. You should not expect too much of money in short period of time.
Internet is certainly not the place where you can make money quickly. Therefore, lower your expectations and do not wait for any miracle.
Finally, in conclusion I would say you must be careful about the investment scams on the Internet. You should what type of they are and how you can prevent it.