10 Investing Scams That Are Easy for Anyone To Fall For

NEWS & TRENDING - INVESTING NEWS
These scams could completely derail your financial plans for a comfortable future.
Updated May 9, 2024
Fact checked
high risk high return concept

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Unfortunately, investing scams are relatively common. While you're likely to encounter an investing scam, staying informed can help you avoid falling for one of these devastating swindles.

It’s hard enough to build wealth without falling victim to a scam. Here’s a closer look at 10 investing scams that could cost you a lot.

Featured partner offer

4.2

Robinhood Benefits

  • Earn more interest on your uninvested cash with 5.00% APY (as of April 12, 2024)
  • Get up to $50K of your deposits instantly, so you can jump on investment opportunities faster
  • Borrow money to increase your buying power with margin investing at 8% (as of Nov. 15, 2023) APY for Gold members
Join Robinhood Gold here

Cryptocurrency scams

ZayWin/Adobe Hacker typing Concept of cybercrime

As an asset class, cryptocurrency has been gaining a big reputation. But since average investors don’t know the ins and outs of investing in crypto, fraudsters can swoop in to take advantage.

Criminals tend to showcase a particular cryptocurrency as a sure winner. After the mark purchases the crypto, the scammer gets to keep the money while you might be left holding a virtually worthless asset.

Before making a cryptocurrency purchase, research the coins you’re interested in. To further protect yourself, buy your crypto assets through a reputable exchange.

Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.

Romance scams

pla2na/Adobe Online internet romance scam concept

A romance scam is often a slow-burning scheme. It starts with a criminal striking up an online relationship with you. When they gain your trust, they might share a “hot tip” about investing. Usually, this “helpful tip” is actually a scam.

If you meet someone online, be careful about trusting them with sensitive financial information. At the very least, wait to share too much of your trust until you meet in person. Don’t send any money to someone you haven’t met in real life.

Investment training scams

pla2na/Adobe Stacked coins in rat trap 

While many scams involve selling you an asset, investment training scams involve teaching you about the stock market. But unlike the many legitimate resources available, investment training scams won’t teach you anything valuable about building an investment portfolio.

The best-laid scams often involve selling you on the “secret” to investing. Plus, many scammers will look the part, with flashy vehicles and clothing, to convince you of their investment success.

Get a personalized financial plan to reach your goals faster

73% of Americans rank finances as their chief stress in life, according to a recent study.1 If you’re part of that 73%, J.P. Morgan Personal Advisors could help ease that stress.

Schedule your free one-on-one financial planning session with J.P. Morgan Personal Advisors,2 and you’ll get access to a team of fiduciary advisors who will create a personalized financial plan catered to your lifestyle and financial goals.

Working with an advisor may sound scary, but J.P. Morgan’s advisors are fiduciaries, so you can be confident that any advisor you work with has your best interest at heart.

Book your free financial planning session here

Real estate investing scams

bnenin/Adobe stressed couple reviewing bills together

Real estate investing scams involve selling you a piece of property for much more than it’s worth. For example, you might be targeted to buy a piece of land with unverifiable development opportunities. 

After you purchase this type of real estate asset, you’ll have trouble reselling it for more than you paid.

Real estate training scams

Andrii Zastrozhnov/Adobe stressed senior man with mortgage issues

Like investment training scams, real estate training scams involve selling you on the dream of making a killing in the real estate business with little to no effort on your part. 

Unfortunately, that’s not the reality of making money in real estate. But once you discover that truth, you might have already wasted thousands of dollars on this real estate training course.

Precious metal scams

zaza45/Adobe jewellery on white background

Precious metal scams typically involve rare coin dealers or metal dealers. They’ll try to sell you coins or precious metals, whether or not it’s a good time to buy. 

In general, these scammers offer a guaranteed profit. But you might get stuck holding a precious metal that is actually losing value.

Pump-and-dump scams

panuwat/Adobe Fake Text messages phishing concept

In a pump-and-dump scheme, scammers contact a list of potential investors to push the purchase of a particular stock. Of course, they promise outlandish returns. 

But when enough people buy the stock, the scammers will sell their own shares. At that point, the stock price falls, and you are stuck holding worthless stocks.

When it comes to investing, avoid purchasing from someone you don’t know. Also, avoid committing to a stock without taking the time to do some research on your own.

Artificial intelligence voice scams

EOL STUDIOS/Adobe senior woman on phone phishing concept

Artificial intelligence (AI) can be used to imitate someone’s voice or image. Fraudsters are taking advantage of this new technology by using it to imitate famous people or one of your friends.

In general, the scam works when a “celebrity” or “friend” calls to tell you about a particular investment. Like all scams, the investment opportunity is too good to be true. If you fork over your money, you likely won’t get it back.

To avoid an AI voice scam, verify who is making the call before proceeding. For example, if someone calls claiming to be your daughter, contact your daughter differently to confirm their identity. Or ask about a memory only your family members would know about.

Advance-fee scam

SecondSide/Adobe money and handcuffs

An advance-fee scam involves getting you to hand over some money now in exchange for big returns later. Of course, when you give the scammer your funds, you won’t see them again.

If someone calls with this type of opportunity, hang up.

Stop missing out on potentially $1,000s of basically free money with this account

If you’re not using a high yield savings account already, we just have one question: WHY?! Maybe you don’t think it’s worth your time to transfer from a traditional savings account … but by not switching, you could be missing out on $1,000s of basically free money. Here’s why:

The Customers Bank high yield savings account offers a rare 4.76% APY3 (annual percentage yield) — compare that to national average APY of 0.45% (as of May 20, 2024). This could be worth hundreds, even thousands of dollars in practically passive income.

To put it another way, in a traditional savings account with the national average APY, a $50,000 deposit would only earn $1,189 with daily compounding interest in 5 years. With Customers Bank, that same $50,000 deposit could yield over $15,200 in the same time frame.4

Open an account today — it takes minutes, and there’s almost zero excuse not to. Customers Bank is powered by Raisin, there are NO fees, and you can withdraw your money whenever you need it. Plus, with FDIC insurance, Customers Bank provides a more secure online banking experience and a safer place to store your extra cash.

Limited Time Bonus: Earn up to $2,000 when you refer friends and family to Raisin. Visit site to learn more.

Click here to open a Customer Bank high yield savings account

Commodities trading scams

fizkes/Adobe stressed woman shopping online using card

Commodities are a legitimate form of investing. But since many of us don’t understand the intricate workings of commodities trading, scammers prey on that.

Essentially, a commodities trading scam involves a scammer selling you a worthless asset. When you send the funds, you won’t get them back.

Bottom line

Rokas/Adobe Incoming call from Scammer

When it comes to investing, if something sounds too good to be true, it’s usually a scam. As you build an investment portfolio, safeguard your assets by staying vigilant for potential scams.

If you spot a scam, don’t hesitate to report it to the Federal Trade Commission.

4.2

Robinhood Benefits

  • Earn more interest on your uninvested cash with 5.00% APY (as of April 12, 2024)
  • Get up to $50K of your deposits instantly, so you can jump on investment opportunities faster
  • Borrow money to increase your buying power with margin investing at 8% (as of Nov. 15, 2023) APY for Gold members
Join Robinhood Gold here

Author Details

Sarah Sharkey Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make more informed decisions. She covers mortgages, insurance, money management, travel, and more.

Want to learn how to make an extra $200?

Get proven ways to earn extra cash from your phone, computer, & more with Extra.

You will receive emails from FinanceBuzz.com. Unsubscribe at any time. Privacy Policy

  • Vetted side hustles
  • Exclusive offers to save money daily
  • Expert tips to help manage and escape debt