Scammers and fraudsters are growing increasingly sophisticated by the day, and their pervasive digital presence makes them a unique threat in the modern internet age. If you are not careful, you could find that the enticing new investment opportunity you found online is nothing more than a consumer fraud or get rich quick scheme.
Common Warning Signs For Get Rich Quick Schemes
Here are some biggest warning signs that you might be dealing with a fraudster so that you can be on the lookout while using the internet.
Those Which Require A Sizable Initial Investment
One of the biggest red flags that you might be dealing with a fraudulent scheme is a requirement that you make a sizable initial payment or investment up front. This is especially true for any opportunities that you did not seek out yourself.
These schemes will often promise “investors” huge payouts that will double or triple their money after a large, up-front “investment.” Alternatively, they may follow a more traditional pyramid scheme or multi-level marketing angle. These kinds of schemes will try to get you to purchase bulk goods that you will be responsible for reselling, or join the business for a fee and then profit by recruiting additional members.
While the fraudsters may promise high returns over time, the inevitable result of a pyramid scheme is that it collapses, leaving those at the bottom holding the bag while the person at the top makes off with all the money.
The Phrase: “I Did It, So Can You”
If you are on the internet for long enough, eventually you will see either an ad or a social media post touting a personal success story. Some of these are very crude and basic; for instance, comments under a news article or YouTube video claiming, “Earn money while working from home.
I made $30,000/week last month while in my pajamas.” Other success stories may be more convincing or sophisticated, putting more effort into creating the illusion of credibility by showing material possessions that the person claims to have gained through their success, providing step-by-step guides for replicating real or fabricated success, or claiming inside knowledge or investment opportunities that they used to achieve success. These are common avenues scammers use to bait potential victims into their scheme.
A Complete Lack Of Transparency
Before investing in any business, you should have a clear and comprehensive understanding of how the business model is generating profit, as well as how that profit is divided among investors or how you will receive your share of profits.
If someone tells you that their business model is too complex or complicated to understand and to just trust them, they are probably lying to you. If you do not have a good understanding of the investment you are making, it is not an investment worth making.
Posturing As A Subject Matter Expert On Stocks Or Wealth
Some more advanced schemes will involve inflating or deflating the perceived worth of a stock or financial asset so that the fraudster can dishonestly profit from the over- or under-valuation of the asset. To do this, people will commonly pose as insiders or authorities on the stock or asset they are seeking to promote. This can be done in a variety of ways, such as posting on social media networks, creating blogs or articles that falsely appear legitimate, and distributing seemingly reputable newsletters.
For example, if a fraudster is holding onto a large amount of a relatively low-priced stock, they may seek to inflate the worth of that stock through an online disinformation campaign. Posturing as a Wall Street insider, an economist, investment broker or some other authority, they will begin talking up the stock that they secretly have a stake in. If they are successful, the stock’s price will rise and they will be able to dump all of their stock for a massive profit. Meanwhile, the people that fell for the disinformation campaign will be left with an abundance of overvalued stocks that will rapidly depreciate and leave them at a huge financial loss.
Get-Rich-Quick schemes conducted online will usually promise incredible returns for an unrealistically small or easy amount of work. Many of these schemes try to hook victims by having no requirements for specialized skills or training, and will usually promise the ability to work from home.
These wild, but enticing claims are meant to grab the viewer’s attention and interest — but if they sound too good to be true, that’s because they are.
Some common get rich quick schemes will promise:
- “Make x dollars/hour” or “make $x after only x hours/days/weeks/months.”
- “Make a 2x/3x/4x return on your money.”
- “Be your own boss and work from home — no skills or experience required.”
- “Earn six figures by working from home part-time.”
Contact The Experienced Consumer Fraud Attorneys
Regardless of how you fell victim to fraud, working with an experienced consumer fraud attorney is paramount to making a successful case. Our experienced attorneys can be a valuable asset in working with you to file a complaint to the Federal Trade Commission’s Bureau of Consumer Protection — the federal body responsible for stopping unfair and deceptive business practices. They can also help you understand whether you have a case and what your rights and options are, and help to make a successful case before a court of law.
Parnall & Adams Law is a trusted fraud law firm that provides representation to Albuquerque residents in nearly all types of consumer fraud cases. Our experienced attorneys specialize in litigating against a myriad of organizations from big banks to car dealers, credit reporting agencies and insurance companies, and are passionate about helping victims of fraud obtain the justice they deserve. Our expansive knowledge of the intricacies of consumer fraud protection and litigation guarantee that we will come prepared to help you in your fraud case, help you understand your rights and next steps and save you time and money. Give us a call today at 505.886.4446 or request a consultation online.