Investing is tempting because it promises a little profit, especially if run seriously. Unfortunately many people who use this to make a profit with the fraud mode. For those of you who are planning to invest money in the form of investment, it is important for you to be more aware of investment frauds. Therefore, you will be able to avoid getting involved in an investment fraud case, like the Vrx Lawsuit, for instance. Here are several common types of investment frauds you need to know:
1. HYIP Investment (High Yield Investment Programs)
This kind of investment frauds is the one that uses a lure which will be quite affordable with an outstanding amount of profit up to 20% a month. The claim of this investment is that your money will be invested into coal business, petroleum drilling, or technology and others. If you happen to get the offer as above, then you need to be extra careful so that you will not get screwed under the guise of investment.
2. Ponzi Scheme
This scheme was first introduced by Charles Ponzi in 1903. Then again sticking, because of the figure of Bernard L. Madoff. The scheme also offers huge payouts.
The requirement is that prospective investors just simply introduce this investment offer to their friends or potential new investors. Ponzi frauds are raising again as they have been commonly offered via the website, email and social media recently.
3. Fake Gold Investments
This one fraud has not been happening recently. We will be asked to invest some money then be given gold bullion. We are asked to buy the gold at a price higher than the market price.
The promise of heaven on offer is that the gold will be bought again at a higher price. The authenticity of gold bars is not guaranteed. What actually happens is that the owner of the company will usually escape while bringing all the cash that has been collected.