Home money How to Identify Investment Fraud or Scam?

How to Identify Investment Fraud or Scam?


Financial experts suggest that investing your money can lead to financial freedom.

Nowadays, there are many investment options available such as UITFs, VULs, and mutual funds. These investment options claim that you can grow your money effortlessly and without using much of your time. But, is there an assurance that your money won’t be wasted considering the fact of possible scams.


As you want to grow your money in a decent way, you need to be extra careful in choosing reliable investment opportunities. For newbie investors, it’s a must to know how to identify investment scams.

  1. Easy, quick, and risk-free investments”

Investment scams come in various forms. The salesperson may say that you may invest in their company without worrying about the risks. This is not true because investment involves risks. In fact, taking on more risks would mean higher possible returns. Be aware of the so-called phantom riches method because it’s impossible to gain return on investments within a short period.

  1. Never believe in impressive catchphrase

Many new investors were drawn in the pitfall of scams because they easily believe in successful claims and impressive catchphrase. You should be careful in dealing with deceptive branding. Most likely, large company or network will always sound excellent and professional in convincing new investors.

  1. Ask about the return on investment

If the salesperson is talking about huge return on investment within a short period, you should think many times. Keep in mind that legitimate investments take time before you see your money grow.

With this, it makes sense asking the salesperson how the company will use your money in generating income. Make sure that the salesperson will tell everything about the process involved in growing your money without hiding any secrets.

  1. Do research about the company

Most companies own a website that’s why if the investment company that you’re dealing with can’t be find online, there’s a great chance that it’s a scam. To avoid getting into scams, the best thing to do is to make your own research and check if they are affiliated with the Philippine Investment Funds Association.

  1. Too good to be true testimonials

You should be careful when dealing with networking schemes. This investment option depends on the number of recruits and they have been using testimonials to lure new investors. Once convinced, you will be asked to pay a registration fee that ranges from Php10,000 to Php50,000.

You can’t become rich overnight when you invest your money. You can earn the return on investment after you have built your portfolio. Likewise, it also requires learning how to manage the risks that may come across your way.


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