How to Avoid a Ponzi Scam

If you're looking for a profitable way in which to invest your money, you are a prime target for a Ponzi scam. In this type of fraudulent investment, you are recruited to place your money in a product or service that doesn't actually exist. Because negotiations and sign-ups are handled over the phone or through the Internet, it is easy to be deceived by a clever scam artist. To avoid throwing your money away, follow these tips to avoid a Ponzi scam.

Follow Your Mom's Advice

"If it sounds too good to be true, it probably is." Your Mom told you that time and again, so make sure you remember her words. Most of the time, you can avoid a Ponzi scam by dismissing investment opportunities that seem to offer too much for too little. This is used as a baiting technique that absolutely will not deliver, though you can't assume that just because an investment sounds legitimate, it can't be a Ponzi. Scam artists are starting to lower their promises to bait more people.

Request a Product

To avoid a Ponzi scam, ask to see a product or talk to a service provider in which you'll be investing. In most cases, you'll be shown the door before you can blink. These scams operate around the sole fact that there isn't a legitimate product or service in which you're investing, and they'll usually back off once they realize that you're on to their game. And avoid services that are based in foreign countries, such as Caribbean cruises and the like.

Ask About Longevity

Because the Ponzi scam is designed to make the scam artist(s) a quick buck, they are usually short-term investments that don't last much beyond six months or a year. Since real wealth is accrued over time, be suspicious of any lucrative investment that promises a large return over a period of months. This is usually indicative of a fraudulent claim that should be further investigated.

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