The internet has been polarized by numerous investment scams which have caused people to lose money. Although these are often targeted at beginners, experienced investors can fall victim to these scams.
These scams could take any format and have been constantly evolving like chameleons. According to the FCA, clone investment scams increased by 29% during the Covid 19 lockdown in 2020.
Some of these online investment scams look real and it’s hard for investors to spot. A survey by the FCA reported that 15% of the investors find it hard to spot a scam and 77% don’t know what a cloned investment it.
No doubt, social media has been a prominent platform used by scammers to defraud people. Most of these victims are those who are looking for a get-rich-quick scheme. But there are some widely used scam techniques.
Bond Scams
Since bonds are long term investments, you can be defrauded and will not realize it until years later.
For example, if you buy a fake bond, you could be receiving coupon payment annually, but at maturity your principal will not be refunded to you. These scams often appear as genuine investment opportunities until the victim has been scammed.
The London Capital and Finance scandal is a perfect example of a bond scam. People were hoodwinked into buying glorified IOUs masquerading as bonds, and about 11,600 people were victims of the fraud.
Some of these scams are also advertised in magazines, newspapers and social media to attract more people…
