Signs of invest. Fraud


How to recognize investment fraudsters

Among the huge offer of investment projects, it is easy to get confused, and in the pursuit of stable income and minimal risk, you can come across scammers. Therefore, it is important to pay attention to how to protect yourself from such a threat.

What is financial fraud

Conscious non-fulfillment by administrators and owners of financial projects of their obligations and terms of the contract to investors is fraud. Such projects and dishonest businessmen are quite common. They are cunning, and it’s more and more difficult to recognize a criminal scheme every time.

There are a number of signs that relate the project to financial fraud. They are rather arbitrary, but their presence already gives an alarming call to the investor to be more careful, or even not to participate in the proposed scam at all.

Signs of financial fraud

Of the most common signs of investment fraud, there are:

– fixed income in the long run;

– uniqueness of the project;

– lack of conditions for the loss sharing;

– limited time for joining the project.

The presence of at least one of the above signs already indicates the doubtfulness of the project.

1. Fixed income in the long run

Regardless of the project, you should definitely consider the conditions for making a profit. When the invested money turns around, despite the forecasts, it is impossible to calculate the exact amount of expected profit even in a short time. What can we say about the long term?

The investment market is dynamic, subject to change, it is influenced by political processes in the world, natural disasters and many other factors that are difficult to foresee. Moreover, there is a risk of loss. That is why the promise of a guaranteed income in the long run is often present precisely in fraudulent schemes.

2. The uniqueness of the project

Almost all investment projects are built on the same proven schemes. If a unique new project is proposed, which was not previously known, then this is an occasion to beware. The calculation of fraudsters is simple: everything new always attracts attention, and, consequently, money.

3. The absence of conditions for the separation of losses

In addition to the conditions for sharing the profit, the conditions for sharing losses between investors and the project owner should also be present. If this clause is not in the contract, then it is worth thinking about placing funds in another investment project.

4. Limited terms for joining the project

Before you invest in any project, you should conduct serious analytical work. This is what distinguishes experienced investors from beginners: they know how to count and analyze. It takes time to collect the necessary information, conduct calculations and consult with specialists.

By setting a tight time frame for participating in the project, fraudsters thereby deprive a person of the opportunity to analyze the situation and calculate the risks. And the fear of losing profit encourages the investor to invest in a dubious project.

The only way to protect yourself from scammers is not to rush. Carefully check the reputation of the projects and carefully study all the conditions of the contract. The most profitable investments are the result of the skillful use of information and the careful calculation of all assumed risks.

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