Top Tips to Identify and Avoid Common Investment Scams

Top Tips to Identify and Avoid Common Investment Scams

Have you ever got an out-of-the-blue text saying that you won a lottery worth AED 900,000 in some contest that you had never registered? Or has any real estate company approached you with a limited-time offer to buy two plots at extremely cheaper rates because you won some lucky draw? Such offers would compel you to transfer your money into some anonymous bank account so as to deliver your product. Regrettably, these are some of the most common property scams in the real estate industry and a large number of people become the victim of these fraudulent emails and calls every now and then.

Although scammers use different, and often innovative, strategies to fool people. Since many frauds including property snagging in Dubai are becoming common nowadays, the mode of operation and overall format is pretty much the same.

Before we discuss tips and tricks on avoiding investment scams, read on to know some of the most common methods scammers use to defraud people to take their hard-earned money.

Types of Investment Scams

Listed below are some of the most common types of investment scams that you should be aware of:

  • Pyramid and Ponzi schemes
  • Real estate investment scams
  • Pump-and-dump scams

Pyramid and Ponzi Schemes

These are one of the most popular fraudulent scams that are used to track people not only in Dubai but all over the world. This scams often involve a scammer compelling you to turn your small investment into a significant profit within a few days.

Real Estate Investment Scams

This scam includes fake developers that call unsuspecting people and tell them about some residential or commercial properties that have just launched, most likely in other cities. They then offer you a shop, plot or a home in their project on low instalments or rates. Most of the time, these people also have a website or office. However, never work with any popular real estate portals or property management companies in Dubai, instead, they work independently.

Pump-And-Dump Scams

Pump-and-dump schemes are fundamentally securities fraud. In this type of scam, scammers reach out to potential investors and compel them to buy low-priced stocks in some business you never know about. The thing is, these fraudsters already have a hefty amount of these worthless stocks. The value of these stocks rises sharply for a short time. It’s only because a lot of innocent investors keep buying them.

Tips to Identify Scams

No matter how much real they appear, they leave some lacunas that can help you identify the frauds. Some of these areas under:

  • They know your personal information and some other details, even though you never provide them to anybody.
  • They pressurize you to make a quick decision by telling you that it’s a limited time offer.
  • They randomly contact you while pretending that they are new or an offshore company.
  • The scammers either ask to make the decision while you are on the line or repetitively call you till you give them an answer.
  • The proposal simply seems too good to be genuine.

How to Protect Yourself Against Investment Scams?

Now that you are aware of some of the most common scams, read these few steps so as to avoid common investment scams and money frauds.

  • Guard your identity. Be very careful while revealing your personal details and identity information to anyone.
  • Never give out your contact information to strangers. They might ask you to solve surveys to get your personal information.
  • Be wary of unsolicited offers. Ask them details if they claim that you have won a prize or your property can be managed at lower rates. Remember, always hire the services of the reputable Dubai property management companies to keep your property safe.
  • Many times, scammers hold seminars and workshops to show them as a legitimate business. This is the most common investment scam to draw the interest of people. In these workshops, they encourage participants to participate in their project (whatever it might be) and vow instant results.
  • Never make any payments without doing any research. If you think that a real estate listing is fake, visit the place yourself and call some local real estate agents or companies that give their services in property management in Dubai for more information.

In all, although scammers move heaven and earth in an attempt to fool you, remember that taking these some preventive measures can save you from landing in troubled waters.

Cristina Macias
Cristina Macias is a 25-year-old writer who enjoys reading, writing, Rubix cube, and listening to the radio. She is inspiring and smart, but can also be a bit lazy.