Understanding the importance of saving and planning for retirement alone does not suffice.
Such a clear vision shall guide us to analyse all alternatives, make clear decisions and take actions in making the most of our savings / investment for an ultimate financial reward at retirement.
Investment helps to promote growth.
It’s money put to use to obtain an income or a capital gain in the future.
Unfortunately, hasty, imprudent decisions may result in losing part or most of our savings and / or investments – with significant consequences on our quality of life particularly when we are close to retirement.
Sometimes the name of a product may not reflect the features of the product and you should be wary of common investment scams.
These scams can turn out to be misleading. Therefore, you need to have a clear definition of these terms. However, these scams should not inhibit you from making any investments.
The following are common investment scams:
This is an old scam with a simple formula: Scammers promise high returns to investors. Money from new investors is used to pay previous investors. These schemes eventually collapse, leaving most of the investors with a financial loss. Pyramid schemes work in much the same way.
A promissory note is a form of debt – similar to a loan – that a company may issue to raise money. Typically, an investor agrees to lend money to the company for a set period of time. In exchange, the company promises to pay the investor a fixed return on his or her investment. While promissory notes can be legitimate investments, those that are marketed broadly to individual investors often turn out to be scams.
Some advisers cheat with unexplained fees, unauthorized trades or other irregularities.
Involves targeting persons with military, religious or spiritual affiliations, by ethnic identity, etc.
There are instances where bank websites are copied by criminals, with a similar address to the genuine bank website in order to trick you. One way to end up on a cloned bank website is to click through to it from a spam email. Fraudsters will also contact consumers and businesses, pretending to be regular suppliers. They may say their bank details have changed and ask you to update your payment details to direct the money to them. Alternatively, they may email you pretending to be a senior member of staff and to try to persuade you to make an urgent transfer.
Card information can be stolen when they copy the information from the magnetic strip of a bank or credit card at a cash machine or in a store – known as ‘skimming’- in order to access your account or create a fake card that has your details on it. There are many other scams that aim to steal your credit card details, either by taking the card itself or by tricking you into giving out the details, such as the security code.
If you are contacted by someone claiming to be a foreigner asking for help to transfer millions of pounds, it is likely you are being set up for a foreign money transfer scam. Scammers can operate from any country. It involves paying money to an organisation or individual under the impression that it will be refunded, receiving a much larger sum once it is transferred abroad. Some victims are even asked to travel overseas to complete the necessary paperwork, but once abroad they are physically threatened or not allowed to leave until more money is paid to the criminals.
Such scams may come in the form of a telephone call or an email that congratulates you on your big win – lottery, drawing, or sweepstakes (a form of gambling). The scammer asks the “winner” for an upfront payment, perhaps to cover a processing fee or taxes. Another variation of this scam involves a letter, sometimes with an authentic looking “Claim Certificate” or a “cheque” as an advance to pay the winnings. Although bankers are generally aware of this scam and how to spot the fake cheques if deposited, the financial institution may hold you responsible for repayment of the entire amount of the fraudulent cheque and the overdraft charges that may result.
Once it is apparent that no winnings are forthcoming, you may receive another call from a person claiming to be an attorney representing lottery winners. In exchange for an upfront fee, the so-called attorney offers to collect the winnings on your behalf. Needless to say, the “attorney” is actually an associate of the original scammer.
Older adults are increasingly the targets of scam artists on the telephone who use lies, deception, and fear tactics endeavouring to convince them to forward money or provide personal account information.