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Global Asset Management Report: Top 8 Investment Scams to Be Aware of

If you’re eager to invest your hard-earned money, there are plenty of opportunities out there. Tons of people are looking forward to investing money in differenttypes of stock and numbers show that doing this can bring significant results. Statistically, for the S$P 500 Index, between 2011 and 2020, the average annual return on the stocks market was 13.9%. However, even if many people are making money by investing, others are losing it because they put their money in the wrong hands, in other words, they get scammed. Here are top 8investment scams you should be aware of.

Ponzi Schemes

The Ponzi scheme is a well-known fraud model that has been replicated in hundreds of ways and countries worldwide during the past years. This scam originated in the US in 1920 when Boston businessman Charles Ponzi first carried out a fraudulent scheme that would carry his name and made a huge amount of money. What this scheme involves is a promise of high returns that lure many people in. Once new joiners contribute with money, older investors are getting paid, which manages to keep the scheme afloat.

However, the scheme comes crashing down when fewer investors start joining and there is no more money for the previous ones. Technically, these schemes can be perpetuated for years, which means great profits for those who carry them out and take the biggest share of investors’ money.

Promissory notes

Promissory notes are promoted as high-return, low-risk investments that resemble bonds. People invest money that should go into loans offered to third parties. Those who get dragged in these scams also receive a written agreement that states they would get back their money with interest. However, this never happens as scammers simply take the money and disappear.


Annuities have also offered scammers a profitable opportunity to take advantage of people and their finances. Annuities represent contracts that oblige insurers to make payments to their clients. They can be used for fraudulent reasons when an advisor replaces a client’s actual annuities with inferior ones and gains commissions from their assets.

Unregistered Investments

One of the easiest scams to carry out is to simply forge the documents that back up the validity of securities. By doing this, fraudsters fabricate proofs that show their investment has properly been registered by regulatory agencies. With documents that look real, scammers can convince people to buy shares or bonds that seem legitimate although they aren’t.

Senior Investments Schemes

Unfortunately, seniors have become one of the most targeted groups for scammers. Given that people are more connected these days, and an increasing number of seniors is using social media, and generally, the internet, they’ve become easy victims for fraudsters. An increasing life expectancy means that people live more, work more, and manage to put aside more money. Scammers are lurking and waiting for these seniors who are looking forward to investing their life savings to fall in their traps. Many have been the schemes that targeted seniors, including Ponzi schemes, promissory notes, or unregistered securities.

Life settlements

Life settlements or ‘viaticals’ have been used in many ways to deprive people of their hard-earned cash, especially seniors or those who suffer from terminal illnesses. There have been many fake life settlement programs that targeted people either through Ponzi scheme scams or by carrying out fraudulent life expectancy evaluations that practically block people from accessing their money.

Pump and Dump

This is a scheme that made many cryptocurrency investors rich while leaving others with a small share of their initial investment. A pump and dump scheme means that a group of informed and wealthy investors who afford to buy stock do this before they start recommending the same opportunity to others. Once thousands of new investors also buy that stock, its price spikes and the initial investors make significant profits by selling their stocks. Naturally, what happens next is a sudden decrease in that stock’s value.

Prime Bank

These scams’ name is correlated with the type of instruments scammers rely on such as bank debentures or standby letters of credit. Con artists that use bank scams lure people into ‘safely’ investing in bank guarantees that are supposedly secured by top-tier world banks. Often,

scammers also claim that the investment is backed by the International Monetary Fund.

No matter which one of these investment opportunities or other options that weren’t included in this list you’re being offered, always be cautious and do some prior research before you decide to invest.

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