Scammers prey on our sense of belief, our legitimate concerns, our insecurities and our curiosity. The key to resisting is to stop and think about the validity of an offer or solicitation.
For example, if substantial and low-risk returns were possible, then why wouldn’t a reputable financial institution offer them?
Scams have evolved over the years, but the keys to protecting yourself remain the same: be sceptical, deal only with people you know you can trust, conduct multi-layered due diligence and educate yourself about your investments and options. Here are our top four tips for protecting yourself.
1. If it seems too good to be true, it probably is
Investment opportunities that offer fast results and returns well above market rates can be at high risk of being a scam. Often, scammers capitalise on the popularity of a trend or asset class – such as cryptocurrency – to make their offer seem appealing and genuine.
The bad news is that once your money is gone, it can be a major challenge to recover your funds. Some people may be tempted to take a high-risk approach, believing their bank can recover their money if an opportunity turns out to be a scam.
However, if you’ve been scammed – if you’ve handed over money or given strangers access to your accounts – then your chances of getting your money back are limited.
2. Invest with professionals you know, not strangers
If you have funds to invest, consider using a licensed financial adviser and always engage with people or institutions you know and trust. Don’t play into a scammer’s hands - these individuals are incentivised to be charming and knowledgeable, to show understanding and empathy.
Ask yourself: if someone you’d never met knocked on your front door and asked for a substantial deposit, on the promise they would return it 10 days later, plus interest – would you contemplate it? It should be immediately clear that this offer is suspicious and dangerous.
When you respond to an unsolicited offer and hand over money or access to your financial and personal details, you’re engaging with that stranger at your door, and putting yourself at high risk of financial loss.