Unfortunately, not even the capital markets are immune to criminals. On the contrary.
Beware of investment fraud. This topic is especially relevant on the Internet. (Photo: Pixabay)
Nowhere else are similar sums being moved day after day as on the global capital markets. Here people often think not in millions, but in billions and sometimes beyond. However, experience has shown that where a lot of money is involved, scammers are not far off. Especially with the increasing shift of trading activities to the virtual space, criminals have also spread and try to get investors’ money there with sometimes extremely treacherous scams. Sometimes with more luck, sometimes with less. In order to stop the scammers, however, we also need enlightened consumers. This article therefore aims to generate a brief overview of scams frequently used in the capital market environment.
Miscellaneous information from supervisory authorities
How current and extensive the problem of stock exchange fraud cases is is evidenced by the numerous articles by regulatory authorities such as the BaFin on the subject. Among other things, investors can obtain qualified information there. However, in some cases it remains difficult to distinguish between serious and dubious offers, also because the other party is also dealing more and more professionally and therefore cannot immediately be identified as a fraudster.
However, investors should prick up their ears in the following exemplary situations, which are described in the BaFin and which, in practice, could proceed approximately like this.
- A retiree receives an unwanted call from what appears to be a financial advisor offering her a once-in-a-lifetime opportunity. This includes an immediate investment in a project that is often not specified, but which immediately promises an above-average return on capital.
- A student is taken to a bank’s website via a link that looks deceptively real and asked to update her online banking login.
- A job seeker is presented with a lucrative job offer as a financial agent in Internet trust service.
Sure, the cases mentioned here are just fiction, but the problems behind them are real and have already occurred in practice to one degree or another.
But what are the concrete warning signs? When should you be suspicious? We will show you the most important points here.
1. Unwanted calls
Who doesn’t know them, the unpleasant advertising phone calls that occur at more or less regular intervals? Most of the time you can get rid of the other person quickly. However, this doesn’t always work. This is especially true if the other end of the line is making an ostensibly reliable impression. However, there is one very important thing that needs to be considered.
These unexpected and unsolicited calls, also known as cold calls, are generally prohibited for securities firms and financial service providers. However, anyone who calls consumers for no apparent reason is most likely not interested in their success, only in their own profit. It is therefore best, even if it may seem uncomfortable and hostile to some at first, to hang up without further ado.
2. Stay critical
Your favorite singer also promotes a particular investment on real-looking websites or social media. Then it must be real, right? Wrong thinking. Unfortunately, criminals are increasingly using personalities for grotesque purposes without the latter’s knowledge. It’s not uncommon for this to be the latest or hottest investment advice in a previously unknown industry. Here at the latest, however, common sense should come into play. In most cases, a lot of money without real consideration remains a pure illusion. Also, be very careful when investments are promised returns well above the normal market level.
The short conclusion at the end
As you can already guess, the two points raised so far are just the tip of the iceberg. In practice, there are a few other aspects to consider in order to identify scams. Which, however, will be the subject of another article on the subject.
