10 Red Flags that Show Something is Probably a Scam

Updated: April 29, 2022

When Bitcoin started making headlines, many wanted to get in and make money from it. And as always, there will be some who will take advantage of this opportunity to scam people.

Recent months have shown several companies and individuals that were shut down and arrested for running Ponzi schemes and investment scams.

And it’s sad that despite easier access to information online today, many are still being duped of their hard-earned money.

Below are ten red flags to look out for before shelling out money for an investment. The more signs there are, the more likely that it is a scam and you should run away from it.

1. No secondary license from the SEC.

The SEC issues a secondary license to grant a company the right to publicly offer and sell securities and to solicit investments. If they can’t show you that license (and not just the SEC registration), then they’re probably a scam.

2. They can’t explain how you’ll earn.

Don’t accept vague explanations on how your money will earn. You need to completely understand how the business works, how the company earns, and how exactly you will earn. Of course, if the offer really sounds too good to be true, then it’s probably a scam.

3. Asking for private information during sales process.

The sales process is all about convincing you to invest in their company. Asking for your private information is a sign that they might just be planning to steal your identity.

4. You have to pay fees before anything else.

If you need to make a payment before you can receive a package you did not order. Or pay a fee to open an account. Or send money to process your transaction. It’s probably a scam.

5. Glaring mistakes in their email and letters.

This is prevalent in email. When you receive one from an unknown sender, and the letter is poorly written with wrong spellings and awkward grammar, then it’s probably a scam.

6. No physical address.

All legitimate companies should have a business address. If they don’t have one or you can’t verify that their office exists at their stated address, then it’s probably a scam.

7. They use a free email address.

An investment company should be able to afford its own domain and company email services. If they’re using Gmail, Yahoo, or a suspicious-looking email address, then it’s probably a scam.

8. They address you with generic terms.

Identity thieves often send emails or letters with greetings that say “To our valued client”, “Dear customer”, or other similar, generic terms. This is a big red flag for phishing emails.

9. Trying to appeal to your greed.

Scammers use greed as a weapon. They’ll try to lure you into their trap with promises of high returns and large sums of money, without really providing any proof that it’s possible or the money exists.

10. They pressure you into investing.

You should never be pressured into investing. People who solicit investments should give you the time to do your own due diligence. If they’re showing you an impatient attitude, then it’s probably a scam.

Are they other red flags that I failed to mention? Please share them below in the comments section.

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  1. 11. The scammers usually use the names of high profile people so that their victims will easily believe on their schemes.

  2. Hi Sir Fitz! This one is totally informative. Many Filipinos get scammed because they always prefer ‘easy money’ over going through legit and secure investments. We just hope the younger or the next generation will soon be more financially literate, and hence, learn more from these mistakes of their predecessors. Here are a few red flags I would like to add however: (11) Scammers are inconsistent with their terms and conditions. (12) They usually sound too desperate and exaggerated with ‘ease of processes’ and ‘returns’. (13) They drag other prominent people’s names into the conversation making you believe that these people really participate in the venture (mostly artista at sikat na politiko, minsan naman nagkicreate sila ‘imaginary’ successful investor). (14) Lastly, they’ve got plenty pieces of financial advice that debunk those given by real financial and investment experts.

  3. I’m glad I stumbled into this entry of yours, Sir Fitz. Recently, a friend of mine got scammed by 2 illegitimate online companies and that made me write a blog post with topic about never invest your money in things you do not fully understand no matter how profitable it may be. In short, don’t trust easily.

    Keep writing more.

  4. Fitz, have you heard of ASMC (Aian Strategic Mining Corp) scam? Its based in Singapore but has a number of Pinoy victims. Very recent lang yan.. I learned about it thru a friend who introduced me to their agent.. But being a victim of Baladjay before, i already knew what red flags to look for which are exactly u mentioned on this post.. I advised my friend to stop and recuperate all his deposits.. unfortunately, he still took the risk. Thus, he got duped a total of P6M!!!

  5. Super sized advise for an ongoing super size problem. We have assisted several people in our business who listened to the sweet sound of easy money investments and are now trying to recover at least a small portion of what they were scammed out of. One lady who, along with her husband, invested their life savings told us, “but they were so assuring, the energy in the room (where the sales pitch was made) was hypnotic.” “I just could not help myself.” They lost a home still on mortgage and a fairly new SUV, also with an existing loan.

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