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Investment Scams: How You Can Avoid Them

Posted On   date06/06/2014

Investment Scams: How You Can Avoid Them

Information is the future, it is the present. In our constantly changing world, information is the most valuable asset that a company or an individual can have. And Edward Snowden is living proof of that. Without good and reliable information, you’re flying blind and there’s no way to accurately measure the risk and the potential rewards of a business deal or any investment you’re planning for your company.  Smart decisions require a lot of homework, due diligence and accurate information.  Clear evidence creates clear winners.

When investing overseas, company executives and small business owners try to obtain as much information as possible. Managers need to know what´s going with the market, they need to investigate about technology advances in raw material, engineering or machinery that can help the company do things better or with lower costs. And the same happens with the service industry. Most of the time, solutions to problems or better ways to face the trends are overseas, and in these cases having the right information is more important than ever. Whether you’re embarking on a new business in China or India, or just outsourcing part of your services, new deals could make or break your company.  It’s essential to verify.

In this scenario, how do you really know who are you’re dealing with? Is there any chance you´re being victim of an investment scam?  Fake companies and other business fraud is more common than ever.  There is just as much criminal activity online than there is offline.  A reputable international investigation firm can help you uncover these hard to find details, and give you the insight you need to make an informed decision.  A professional investigator can verify if the company is registered, verify the company size registration and history, investigator for reputation, and any history of fraud or litigation.  International investigators can even obtain independent third party references, and visit and photographs claimed offices, factories and facilities.  In short, the right investigator can verify the information and minimize your risk.

These are some of the scenarios where a background check investigation, international due diligence, or company verification can help prevent you from being a victim of fraud.

  1. Be aware of fake companies. Investing or doing business internationally requires a keen eye. The main problem is that you may not know anyone in the other party´s country who you can trust to verify the facts. You will most likely need a professional who not only lives and works where the company is located, but who is trained to verify that there is an actual company and revenues behind a stock symbol. Investing in a false company is not as rare as it used to be, and being listed on the NYSE no longer means it is safe and verified.
  2. Don’t hope documents and filings are true.  Do you know how easy it is to register a company?  Did you know that in most criminal operations involving fake companies and websites, the company is a registered and a “legal” business?  Crooks know that many people only check business registration and fail to do real due diligence.  They in turn usually file a registration to make victims believe they are real entities. A reputable investigation company can verify the business behind the paper filings.  In other cases, criminals will assume the identity of a real and reputable company, but you don’t realize they actually are not with that company.
  3. Make sure the website is real. Fake websites are one of the easiest ways to steal your money, and have been on the rise in recent years. Scammers use the existing information of a real company and build a phony and similar website. They may even have a fake Facebook page and different social media profiles linked to it. It is sometimes hard to tell apart a real website from a fake one. Internet criminals are getting creative, so verify the website you’re dealing with is legit.  Search the Internet carefully to see if anyone else has dealt with the company, and check for trust seals to see if the site is verified by Truste, McAfee or the Better Business Bureau.
  4. Watch out for red flags.  What may seem safe to you, may seem like an obvious case of fraud to the eyes of a trained professional investigator.  Hiring a private investigator can help you protect your private information and add a barrier of protection between you and your potential investment.  Investigators are trained at uncovering risk factors previously unknown to you, and can verify reputation, offices, facilities, ownership, history of litigation or fraud, revenue, operations and more. Never send a dime or personal data to any unknown business or company until you’re sure you know who you’re dealing with.  Be safe, verify.
  5. Protect your private data.  Most victims go wrong when they say the scammer never asked for money.  What most people don’t realize is that criminals today don’t need to ask for money to steal your money and cause you major problems.  Sometimes, it’s the information they are really after, especially if your company has something they are looking for, like sensitive or private company data.  In other cases, criminals may just be setting you up for some blackmail or extortion.

Wise decisions are taken with accurate and reliable information. Start examining your international investment options.  Do your homework and verify as much of the information as possible.  Prior to handing over your sensitive data or payment, however, let professional investigators take care of the hard part and obtain the evidence you need so you can make an informed and profitable decision.

C. Wright
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