There are some tricks that fraudsters use to lure investors with promises of extraordinary profits. These fraudsters often target areas with low financial literacy like the northeastern parts of India, but Malayalis are not far behind in falling prey to fraud. Recently, the Guwahati police arrested several persons involved in fraud worth thousands of crores. Dressed as stock market experts, these fraudsters lured people into investing with them by promising them high returns.

Some of the tricks these scammers use and most importantly, how you can protect yourself from falling into their trap Let's see if we can escape:
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Asking to deposit money into personal accounts

The first red flag is when these scammers ask you to deposit money into personal bank accounts instead of creating an investment account. These people will claim that direct payments will cut out middlemen and reduce fees, making it attractive. Therefore, it is essential to check the credibility of the financial institution and ensure that you are paying into a legitimate account. Before handing over money, do thorough research on the company or person you are dealing with. A search for reviews, complaints or negative experiences will save you from being scammed. Understand that legitimate companies will never ask you to pay into a person's bank account.

Offers 10-12% monthly returns

One of the most common tactics used by fraudsters is to guarantee high monthly returns - often up to 10-12%. They will also say that there is no need to take any risk related to stock market and trading. Investments that promise high returns without risk are often fraudulent. Most people know that every investment, including low-risk investment options, involves risk. Therefore, it is important to ask detailed questions about where the money will be invested and how such income will be generated. Be careful if the answers seem vague or too complicated.

Large investment amounts

Fraudsters often ask for large sums of money saying that they will only be profitable if they invest quickly. This exclusivity and urgency is a deliberate ploy to pressure you to act quickly. You may be told that the opportunity is available to a limited number of people. In such cases, it is important to take a step back and assess the situation rationally. Ask why this opportunity requires such a large sum of money and compare it to similar investment opportunities. Avoid making hasty decisions, especially when large sums of money are involved.

Pressure tactics to create a sense of urgency

Fraudsters know that creating a sense of urgency can cause people to make rash decisions. By using phrases like “limited time offer” or “act now before it's too late,” they pressure investors to act quickly without fully understanding the investment. It is important to remember that legitimate investment opportunities do not require immediate decisions. Take your time to review investments, consult with trusted financial advisors, and carefully weigh the pros and cons. If the opportunity is real, it will be available even after you do your research. Scammers, on the other hand, rely on people making quick decisions.

Showing fake success stories

Another common tactic is to display fake success stories of people who have made significant profits. Fraudsters often buy glowing testimonials from people who don't exist or are part of a scam. These stories are designed to make you believe that others have profited. It is essential to verify such success stories by asking for documentation, credentials and contact information that can be cross-checked. If you cannot fact-check these individuals, you should exercise extreme caution.

Luxurious lifestyles are used for seduction

Such people often use images of luxury living to attract investors. They may flaunt expensive cars, exotic vacations, and lavish homes to create the illusion that their investment strategy will lead to extraordinary wealth. Instead of focusing on the lifestyle being portrayed, focus on understanding investing. How does it generate revenue? What is the risk involved? Rather than being dazzled by the promise of luxury, analyzing the investment on its merits can help you avoid falling for this common scam.

preys on human weaknesses

These people are skilled at preying on human weaknesses, especially greed. They know and focus on the victim's trigger points. If you are eager to show off your expected future investment gains, it could be a sign that you are manipulative.

Being level-headed is essential when considering any investment opportunity. Don't let emotions cloud your judgment. Instead, always research the opportunity and consult with a financial expert to make sure it's legitimate.

The best way to protect yourself from financial scams is to be vigilant. Always do thorough research before making any investment and seek reviews from trusted sources. If you are ever in doubt, consult a professional financial advisor before handing over money.