Most Common Types of Scams in The World of Finance

Refund Emails
Refund Emails

These days, many suspicious companies promise you to make money quickly by “playing” on the financial markets’ ups and downs. Others offer you reputable risk-free investments that provide incredible returns, and what’s more, guaranteed.

These promises may tempt investors looking for better-paying investments and diversification of portfolios. However, most of these promises are misleading and risk costing because there is no such thing as high returns without high risk. Let’s see what the common types of scams in the world of finance are.

Fraudulent tax refund emails

If you receive a mail promising you a tax refund, stop jubilating. It could most probably be the attempt of phishing for your credit card number or other very sensitive private data.

In this kind of scamming activity, the receiver is requested to send via email personal and bank account details on what is supposedly a linked page on the central bank or some financial institution website. The email usually contains a hyperlink. When you click on it, it opens seemingly the website of a national bank, for instance.

But if you take a look closer, it’s noticeable that the website address shows some completely different domain. The goal here is to make you enter sensitive details such as CVV number and credit card number, and expiry date. With these data in their possession, any scammer can make unauthorized online purchases and money transfers.

Forex scams and binary options scams

Some advertisements on the Internet make it seem like you can become a “trader” in a matter of days or weeks. The flattering speeches of “brokers” on the phone are encouraging, and they promise personalized support. In the majority of cases, the investor ends up losing all of their money. Many of these websites offer you to trade on Forex without authorization from any local financial authority. The money you deposit could be quickly embezzled, and if you hope to reach customer support to answer your questions, leave your hopes behind.

You have minimal remedies at your disposal due to the location, often abroad, of these illegal providers. However, there is always an option to report a forex scam. In that way, you will spare other traders from many troubles.

Promises to reimburse funds and identity theft

Many savers who have already lost money on unauthorized trading platforms are contacted by so-called law firms or people claiming to be mandated by the local financial authority body to recover the lost sums. They are asked to pay fees, a percentage of the amount lost, or are redirected to other fraudulent websites. It’s obviously a scam aimed at getting the money again. None of these persons or entities are authorized to do so.

Likewise, other scam websites usurp licensed companies’ names and direct novice traders and potential investors to official registers to make it appear that they have a license. Faced with these scam systems’ sophistication, people must increase their vigilance: verification cannot be limited to a single consultation of financial registers.

Beneficiary scams

You’ve probably heard of the scam of a supposed Nigerian prince. But, most of the time, they come from a “businessman” who claims to have so-called millions. And he wants to get out of his country asking you for help in exchange for part of the interest. The sender mentions just enough details to make the offer seemingly legitimate. But funds are systematically delayed, and you have to advance many fees to facilitate the transfer of funds.

It’s easy to get tricked into this type of scam. Therefore, you need to identify some telltale signs. Grammatical and spelling errors in the original email and a reply-to address not matching the sender prove that, especially on the Internet, anything that sounds too good to be true probably isn’t.

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