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قبل التداول‎، يُرجى التأكد من من الاستيعاب الكامل للمخاطر المرافقة للتداول
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Sunday, June 21, 2020

How to detect a financial fraud while investing with fund management houses in 5 simple steps

How to detect a financial fraud while investing...

What is a Financial Investment Fraud

An investment scam is when someone offers a totally fictitious investment fraud scheme which doesn’t exist, also if the investment exists but the fraudster takes the money instead of putting it in the opportunity and pretends they’re representing a legitimate and trusted investment group, but they’re lying. There are many different types of financial scams floating around which we hear in news or read about in internet, so it would be impossible to identify them all. Even if one could detail each scam out there today, a new one will be introduced tomorrow.

Steps to Identifying a Financial Investment Fraud

There are some steps which you can follow to identify signs of an investment fraud:

Step 1 - Verify and conduct a background search: Before you decide to place an investment with any particular investment company, you should check their background thoroughly. If the firm is reputable, then it should have a name that you recognize or have a history that you can trace. Verify credentials are very important and if you cannot track the company or investment firm’s history, then you should be very cautious before handing over any money. Investment company must be registered with local authorities and regulators.

Step 2 - Avoid investment schemes that guarantee return: To encourage you to invest, an investment fraudster may show you a history of returns. Nothing is likely to be 100% wonderful, so if you see results that claim to be positive consistently over a period of time, you should be skeptical. However, when these financial fraud schemes are advertised as fool-proof ways to get rich quick, it's time to proceed with caution. Even the best traders and analysts are going to experience some ups and downs. Financial fraud scheme is one that shows consistency of the promised returns. The reality is that every investment involves risk.

Step 3 - Keep track of your investments: Review your investments regularly to make sure you're on track to reach your financial goals and you're comfortable with the investment risks. If you have any queries about the placement of your investments or the access to your funds, which are not answered clearly you may be dealing with a financialscam. If your investment company does not respond to you, it may be a red flag that he or she is not looking out for your best interests.

Step 4 - Keep emotions at bay: No matter how close you are to a person or how trustworthy he seems, always research the company and investment product before parting with your hard-earned money. The investment needs to suit your needs according to your life stage. Don’t invest because the person seems nice or is known to your friend circle.

Step 5 - Ignore claims of the popularity of the investment: Avoid in believing claims that a high number of investors are considering taking the deal. Regardless of the number of people investing in something, this is not evidence that the investment is sound or even legitimate. Rather than concentrating on how many people are investing, an individual should know why the investment is sound. Ask for evidence and the history of the particular product or investment and read the reports presented thoroughly. Review all your documents and discuss your course of action before taking more drastic measures.

Bottom Line on Detecting a Financial Investment Frauds

Investment fraud schemes come in many forms, but they all have one thing in common that is the promise of very high returns. The sad truth is that many people fall for these schemes because their greed overcomes their reason. Don’t let this happen to you. If an investment opportunity sounds too good to be true, it’s probably not. If an opportunity promises sure-fire returns, take extra time to research the company, the market, and the broader economy. Keep in mind that communication is the key and proper regulation is the single most important factor that can guarantee the safety of your funds. Hence, we suggest you trade with company's holding legit licenses from local authorities and regulators. Investment scams are a crime. Don’ let your rational voice get suppressed by your emotional one.