Unfortunately, scams occur everywhere and can affect anyone, and the investment world is no exception to this reality. Being aware of common investment scams, however, can greatly reduce the possibility that one ends up being financially misled or taken advantage of. The following information was recently presented by FINRA in hopes of guiding investors and increasing awareness surrounding possible scamming techniques that may be utilized by investment agencies.
FINRA identified these strategies to be the most common ones used to scam investors:
- the “Phantom Riches” tactic: misleading an investor by making them want something that they can’t have. Most commonly utilized in regards to money.
- the “Source Credibility” tactic: attempting to invoke trust from a client by falsely claiming to have special experience or expertise on a subject.
- the “Social Consensus” tactic: misleading an investor by claiming that many successful individuals have already invested in the given subject.
- the “Reciprocity” tactic: offering to do a favor for an investor in return for their business or trust on an issue.
- the “Scarcity” tactic: misleading the investor by falsely claiming that they must act quickly due to a limited supply of the product or investment opportunity.
If you feel that you were the victim of any of these scamming tactics, you may be able to regain some of your resulting financial losses. Contact experienced Securities and Stock Fraud Attorney Thomas C. Bradley today to find out how he can assist you in your effort.