If you are entering the investment world, you need to be aware of the fact that there are many investment scams being perpetrated by fraudulent promoters, and that no matter how astute you may be, it is possible to be duped by them. You must always stay vigilant.
Here at Whitmore Capital we believe that to be forewarned is to be forearmed. We consider it our duty to warn our clients about fraudulent companies and the financial scams being orchestrated by them, especially since these financial scams are now far more sophisticated than they used to be. Fraudulent firms have honed their financial scams and it is now very difficult for even experienced investors to work out what is genuine and what is a scam. The advent of the internet has given the experienced fraudulent promoters the tools which allows them to reach a mass audience and to be able to obtain pertinent client information which they can then use for financial scams designed to obtain money by fraudulent means from unsuspecting investors.
All of our Whitmore Financial Advisors take this matter very seriously, our responsibility to you, our valued clients, to safeguard your interests against these fraudulent companies and their financial scams. With that in mind, we have compiled a list of some of the most common financial scams in widespread use at the moment and the tools the fraudulent promoters use, as well as some other alternative scams which are designed to dupe not just investors but the ordinary member of the public.
Ponzi Scheme – One of the most famous financial scams and one which has been around since Charles Ponzi first duped investors in the 1920s. It’s based on a pyramid structure whereby investors are promised that their money will be invested in schemes which guarantee huge returns, and indeed for a short while they actually get pretty big monthly returns. However, in reality, none of the capital is being invested into anything, and the money from new investors is used to pay these monthly interest returns to the previous investors. This financial scam collapses when there are no new investors.
Whitmore Scam Alerts:
Whitmore Scam Alert No1: A strong emphasis on you recruiting more investors
Whitmore Scam Alert No2: Promises of huge returns for your investment
Whitmore Scam Alert No3: The fund promises to invest in a company which is hard to value, like a tech company
Whitmore Scam Alert No4: The fund promises to invest in a business which has no sales figures and does not produce anything
Boiler Rooms – These are fraudulent companies which cheat investors by selling false or overhyped stocks, or by buying up in bulk shares whose price they have helped to drive down using smear campaigns. The two most common financial scams perpetrated by boiler rooms are the “Pump & Dump”, whereby they boost the price of the stock of a small company by spreading false information before then selling it for over-inflated prices, and the “Short & Distort”, where they drive the price of a good stock down by using smear campaigns before then buying it up in bulk and selling it for a huge profit.
Whitmore Scam Alerts:
Whitmore Scam Alert No1: Bad news stories and ‘warnings’ from other investors on online bulletin boards
Whitmore Scam Alert No2: Fraudulent promoters offering you the “deal of a lifetime”
Online Newsletters & Online Bulletin Boards – These are actually perfectly legitimate tools that many investment firms will use in order to attract new clients or keep their clients up-to-date with market movements. However, they can also be used by fraudulent promoters in their financial scams by way of over-inflating stocks, or pushing the price of good stocks down so that they can dupe innocent stock holders into selling their shares (to the fraudulent promoter) of a strong company for negligent prices.
Whitmore Scam Alerts:
Whitmore Scam Alert No1: A newsletter which talks about a stock but fails to disclose who the promoting company is
Whitmore Scam Alert No2: Fellow investors giving out ‘helpful’ tips and warnings on online bulletin boards.
Email Spam – This is a tool used by fraudulent promoters in order to obtain sensitive information which they can then use to set up their financial scams. Unsolicited messages will appear in your email inbox which will have a link for you to click which will then take you to a ‘phishing site’. These sites are installed with malware, which is software designed to gain access to your computer system and gather sensitive information to be used at a later date for a financial scam.
Whitmore Scam Alerts:
Whitmore Scam Alert No1: An email which promises you big rewards for low risk when you click on the link
Whitmore Scam Alert No2: Phrases like “This Is Your Lucky Day”
There are many scams being perpetrated by fraudulent promoters which are aimed not at specifically investors but rather at the innocent members of the general public. Here at Whitmore Capital we have compiled for you a short list of the most common scams.
Nigerian Money Transfer Scam – an email from a stranger who offers to share millions with you in exchange for your bank information so that they can transfer the money over to you in order to get it out of their country (usually Nigeria).
Free Gifts Scam – an email which will inform you that you are due to receive a free gift, but you must first send a small ‘administration’ fee, or your bank details.
Lottery Winner Scam – an email which will inform you that you have won the lottery, but you must first send a small ‘administration’ fee, or your bank details.
Dating Website Scam – usually targeting men, whereby an attractive woman will befriend you with offers of meeting up and will then ask you for money in order to pay for an emergency.
Income Tax Rebate Scam – an email which will inform you that you are due for a tax rebate and asking for your bank details.
Income Tax Debt Scam – an email will inform you that you have unpaid taxes and will ask you to pay or face a stiff penalty.
Malware Software Scams – there are many scams which involve different ways of installing malware on your computer in order to steal your information, including the offer of Free Gift Vouchers.
These are just some of the most common scams used by fraudsters today. Please be advised and if you have any questions or concerns, please contact us for further information.
For further information and independent advice, please contact one of our Whitmore advisors.