As inflation rises, money worries are becoming realer than ever for many Brits. The stress caused by money worries means that the average person is more likely to fall for scams – especially when the scammers appear to promise a way to improve your financial situation.

Research from the investment advice platform InvestinGoal reveals the most common types of scams that have been hitting the public in recent months. Here are 5 of the worst culprits to look out for.

Boiler room scams

Boiler room scams are when the scammer sets up a fake company. They encourage people to invest in what appears, on the surface, to be a promising investment opportunity. Unfortunately, the whole thing is a facade. After attracting investment, the scammers disappear, the company disappears, and your money disappears with it.

Ponzi schemes and pyramid schemes

Ponzi and pyramid schemes often involve slick marketing which encourages people to get on board. They often get average people – like your friends and family – on board, which is partly what makes them so convincing. The reason they work so well is that the first cohort of people who join may actually get some returns on their investment (while the scammer takes an even bigger return). However, latecomers can be sure that their money is going straight into the pockets of the con-artists who started the scam.

Fake gurus

Fake gurus are probably the best known type of scammer on this list, as social media has given a platform to many of them. Fake gurus typically make their money from selling courses. They flash their seemingly lavish lifestyle over social media, claiming that they will share the secrets of their wealth with you if you buy their course. The courses typically contain little if any useful information. Rather than make you rich, they simply take money out of your pocket and put it into their own.

Software scams

Software scams are when fraudsters tell you that they have special software that will automate trades to make you a fantastic return on your investment. They encourage you to send them money – which they will ‘manage’ with this software. The reality is that there is no magic software that’s guaranteed to make you money. There is such a thing as trading algorithms, but they do not guarantee success. Be wary of anyone who tries to lure you in with such claims.

Pump and dump schemes

Pump and dump schemes do normally involve ‘real’ companies or assets, but that does not mean they will make you any real money. Similar to boiler room scams, pump and dump schemes look very appealing at the outset. The scammer will signpost you to a seemingly brilliant investment opportunity of a stock or cryptocurrency that is set to grow massively and make you a tidy sum. The scammers attract more and more investment, and, for a while, the price rises. What the scammers don’t reveal is that they own a huge share of the stock. They will then suddenly sell their share, which means they take huge profits – and your investment diminishes to a sum much lower than what you originally invested.

How to avoid scams

You need to be on guard against anyone who offers you unsolicited advice about what to do with your money.  In the first instance, you must be extremely wary of anyone who calls you out of the blue and tries to convince you to ‘invest’ or otherwise part with you hard-earned cash.

For a second port of call, search on Google for the company or person you want to know about. If it’s a scam then you will either find that there is suspiciously little information, or there are already negative reviews and comments in money forums.

Before you do anything, consult an expert. Turn to a respected online forum, or even pop into your local bank branch for advice.


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