Investment Scams

Have you ever been asked to provide personal information to make changes or receive important updates to your account? Well then, maybe we have been a victim of an investment Scam. Here are a few of the most common scams around today.

Andrew Horowitz
5-minute read
Episode #073


Today on Money Girl I will be discussing how to keep clear of those nasty investment scams.

Listener Gen-Gen writes in: Love your podcast. I was wondering about 801k's... whether they are for real or not. Supposedly, it is the governments super secret way to save for retirement at about twice the rate of a 401k. Sounds like a scam and I can't find any other information on it around the 'net. Thanks in advance... Good question, and I have never heard of these and cannot find anything anywhere either...Sounds fishy and got me thinking about the times I received legitimate-looking e-mail that turned out to be scam. Have you ever been asked to provide personal information to make changes or receive important updates to your account? Well then, maybe we have been a victim of an investment Scam. Here are a few of the most common scams around today.


These are usually disguised as call to action e-mails sent by Internet criminals trying to get your personal information so they can access your accounts or steal your identity. Here is the perfect example of spoofing: Spoofing is when a user tries to access a site by pretending to be a different user. Typically they will try to get you to provide information such as passwords through the e-mail sent to you so they can take that information and attempt to access your various online accounts, especially your bank and investment accounts. Be careful.


Another common and similar scam is phishing. In phishing scams the perpetrators set up websites that appear legitimate with the intention of having visitors access the site and provide sensitive material which their system will download and use to access their accounts. This is very common with banking sites because when perpetrators are able to gain entry they can then use the bank accounts as they choose. Often they will make transfers to other accounts, thus stealing your money.

Dead Man Charging

Another sadly common scam is when criminals attempt to access the information of recently deceased people and obtain credit in their names. Of course the bad guys don't pay off the credit cards and the family of the deceased is ultimately left with the bill. This unfortunately means that during a horrible time in their lives, the family of someone who has died must protect themselves and issue what's called a deceased alert. This message or document sent out to credit companies certifies that a person has died and should not be issued credit in the future.

Advance Fee Fraud

Others forms of scams include those that require someone to help with a foreign money transfer in exchange for a large commission, usually in the sum of several million dollars. The notorious Nigerian spammers operate these kind of scams, and despite the fact that the offers seem too good to be true and scams like this have been going on long before the Internet even existed, every year new people are taken in. These types of scams are almost always conducted via e-mail these days where the recipient receives an e-mail about the request for assistance in wiring a transfer. If you respond to this request you are prompted for information and money to help pay for some of the costs supposedly associated with the transfer. Sometimes that is all and the criminal masterminds disappear. However sometimes they come back and ask for more claiming that there was a problem with the transfer and they need to try it again. These types of scams are also known as “advance fee fraud.

Tips to Protect Yourself

There are hundreds of different scams nowadays. It’s a sad truth but you have to protect yourself or you will become a victim.

* Number one--don’t assume a website is legitimate just because it looks nice. If you get a link in an e-mail and you click through to a fancy looking site don’t make assumptions. Check it out. Do a search for the company. These e-mail links are often fake. If you receive an e-mail asking for information from a company you know, like a bank, go to the company website directly rather than clicking on the link in the e-mail.

* Next, your social security number is hardly ever needed. You have to use it for job application and when applying for credit, other than that be very cautious if someone asks for it, they’re most likely trying to steal your identity.

* Charities don’t solicit for donations via e-mail. If you receive such a message that then asks for your phone number or e-mail address simply stay away. There are a lot of sick people out there that try to prey on the generosity of others when it comes to unfortunate events and sickly causes.

* Avoid pop-up windows that ask you to enter personal information. Legitimate banking and financial sites do not operate this way.

* Be sure to create complex passwords and change them often in case someone figures one out. It also helps to have several different passwords for various sites so that in case one is cracked they can’t get into all your accounts and online systems.

* Don’t respond to offers that require you to “act immediately or else.”

* And last but not least, if something seems to good to be true it probably is. As much as you might want it to be true it probably will just end up being a hassle and set up back more than it will ever make you. Be careful, the world is full of scammers trying to prey on the unsuspecting, innocent, ignorant and naïve. Don’t allow yourself to be a victim, educate and protect yourself.

Find more ways to protect yourself online in Money Girl's episodes on identity theft, 8 common scams to avoid, and job scams.

Cha-Ching …and that’s all for now. Thanks for tuning in to “Money Girl”. This is Andrew Horowitz, usually The Winning Investor here on QDT, sitting in for Money Girl. I invite you to listen to my other weekly podcast, The Disciplined Investor, also available on iTunes. AND, if you want to be more successful with your investments, download my bestselling audiobook from iTunes. The Disciplined Investor - Essential Strategies for Success. - To celebrate the launch of the audiobook, we will send the original paperback to the first 50 listeners who purchase the book from iTunes.  Details below.

As always, everyone’s situation is different, so be sure to consult a tax or financial advisor before making important financial decisions. This podcast is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice.

Thanks for listening! Gen-Gen is getting a copy of GrammarGirl’s Quick and Dirty Tips for a better writing for helping us with a question for this episode – be on the lookout for the first book from a Quick And Dirty Tips podcast ! Grammar Girl's Quick And Dirty Tips for Better Writing by Mignon Fogarty will be available wherever books are sold on July 8th. Reserve a copy now or preorder one from your favorite online retailer.

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Andrew Horowitz Money Girl
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