“Make big money — now?” The FTC says it’s a scam

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It’s probably a good idea to avoid real estate coaching offers, too

“Hi! I just made $600,000 thanks to a little-known secret about buying cryptocurrency!” The Federal Trade Commission (FTC) says overtures like that are starting to fill up email in-boxes by the score and that every single one of them is a fake.

Can’t-miss opportunities are just one of the arrows scammers use, but investment scams cost Americans close to $4 billion last year and the agency is doing all it can to stop that number from going higher.

How an investment scam works

Investment scammers don’t waste their time on promising a target they can make $25 or $50. They want to create the impression that someone can “make lots of money" with "little to no risk." Jim Kreidler, a Consumer Education Specialist, at the FTC said that those come-ons often start on social media, online dating apps, or from an unexpected text, email, or call. 

But how do you tell the difference between a legitimate investment — and a scam? For one thing, don’t accept any unsolicited offers.

“If you get an out-of-the-blue call, text, or e-mail about “an amazing investment opportunity,” it’s a scam. Hang up. Delete. Walk away. Especially if they want you to take money out of your 401(k) to invest,” Kriedler said.

“Reject the high-pressure pitch. Scammers try to plant an image in your head of what life will be like when you’re rich. Don’t believe it," Kriedler said. "They’ll say ‘This is a once-in-a-lifetime offer — and it will be gone tomorrow.’ But, if it is a legitimate investment, the person on the other end will let you take the time you need to investigate before spending any money."

Kriedler has two other suggestions, starting with doing your own research.

“Don’t make any investment until you’ve checked it out. Research the investment and the person offering it. Search online for the name of the company plus ‘review,’ ‘complaint,’ or ‘scam.’”

His second? “Don’t believe promises that you’ll make money or earn guaranteed returns. No one can guarantee you’ll make lots of money with little to no risk — anyone who does is a scammer,” he said.

There are also investment coaching scams to worry about

A twist on investment scams is the “investment coaching scam,” where a scammer will pitch you on their “patented,” “tested,” or “proven” strategy (or something similar) they say will teach you how to make money investing in stocks, bonds, foreign currency, or tax liens.

Promises like “Now, you’ll be able to retire without a worry in the world!” are full of problems. So are many real estate investment seminars where you’ll be coached on how to rake in money by working part-time or at home. Sure, it’s possible that someone may have made some money off of a real estate trick, but most people never make their investment back, the FTC said.

For a full breakdown of all investment scams the FTC has seen, they’re available here.

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