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How to Protect from Investment Scam

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A high caliber Finance Professional with an experience amounting over 30 years, majorly across various facets of Investment.

How to Protect from Investment Scam

How to Protect from Investment Scam

Investment scams are happening everywhere regularly. Uneducated small investors are duped by well-trained fraudsters. They create false hope and investment model which easy to catch and has least regulatory control.

Small investors are duped by creating fancy advertisement in newspaper and media and by even management. This flash gives false hopes to investors and they start investment. Another important point these investment schemes gives regular return to investors, Quarterly, half yearly, many of them even promise monthly.

Some of Big Scams in India

Sahara Group was one of biggest Brand of India. It has branches all over India. It was having different license and thousands of related companies. They had very simple modus operandi, collecting money under different scheme and then transferring to related companies.

They had license for Non-Banking Finance Companies NBFC

They had license for Chit Fund

Real Estate Companies

Airline

Hotels

They have investment and Companies across the sector. They use to give regular returns, when government started questioning their modus operandi and structure. The company has fallen like House of Cards.

Chit Funds

Chit Funds are one of Non-Banking Institutions. They are least regulated. Once upon time India was having hundreds of Chit Funds all over India. Many of them are locals, but many was having branches all over India. They are basically Rivals to Banking, giving very returns to the Investors and most of them were not asking for source of funds.

There were no prudent regulation, control and third party verification has made them easy to siphon of funds. Chit Funds collapse because of Corruption, they are willful defaulters. Their intentions are making money for themselves.

Some of these Famous Scams are Saradha Chit Fund, Sahara Financial, Rose Valley, PACL,

These are huge investment schemes, they take money from unsuspecting individual and then they vanish or collapse. This is long cycle. Some of them survived 15 years, 20 years and many more years.

The returns they give are very high.

Investment Scams

The Big Investment Scams

The Big Investment Scams

Plantations Companies

Plantations Companies

These are another level of cheating. Green Gold group of companies, and many more. These companies say they are investing in Plantations.

Teak Investments

Plantations

Agro Farms

There are different similar ideas in Agriculture. They claim the returns are very high.

Green Wood Plantations

Anubhav Plantations

Wood Plantation

Bamboo Plantations

These companies are basically fraud. They not only siphoned off money but most of them are part money laundering rackets.

Doing proper due diligence is very important to protect yourself.

Goat Farm, Live Stock, Emu Farm Investments

These are another type of investment scams.

Livestock farming was craze and many investment schemes come lure investors. With more than 100% returns annually, it becomes one of most promising investment option.

Goat Farms – Double your money in one year.

Emu Farms – Double your money in six months.

Similar to Plantations, these are theoretical calculations, one of most important thing to understand is Livestock is dependent upon nature and the investment not be tested before or commercially tried before. Even though it looks true but fail to achieve its objective of high returns and almost all of them goes burst in year or two, some may have stayed longer than this, but all of them gone burst. Most of them because of ill intentions.

Siphoning of Funds and malpractices.

Emu Farm was latest Fraud to happen.

Agriculture Scams Livestock Scams

Goat Farm

Goat Farm

Halal Investment Scams

Halal Investment Scams

Scams

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Ponzi Scheme

Halal Investment Scheme, Gold Investment Scheme –

This is how religious sentiments are exploited to make money. Muslims do not invest in interest bearing schemes and prohibited. Every now and then, Halal investment schemes prop up. These schemes are Ponzi schemes giving high returns. They invest in Gold, Trading and other activities. Unfortunately, there is least transparency and no third party Audit.

Every Halal Investment Scheme must have Shariah Audit but in reality they do not exists. Another problem with these schemes are, they are not legally approved and there is no over sight. This is how they fool the Investors.

Heera Gold Investment

Gold Investment Bangalore

These are latest but there is long list of such scheme.

Why are called Ponzi Schemes

Ponzi schemes are basically collect money and then distributes from collection of new investor. This goes on till it goes burst.

They really do not make real profit. They only distribute fake profits from their collections. They even do not have assets or physical net worth. Everything is dark. There is no transparency and no compliance.

These schemes do not have enough legal backing and approved by Investment Monitoring Authorities.

How to Protect from Investment Scams

How to Protect from Investment Scams

How to Protect from Investment Scams

How to Detect Scams

How to Detect Scams

Plantation Scams

Plantation Scams

How to Detect Investment Scam?

How to Detect Investment Scam?

There are few common features of all scams

Very High Returns

Regular Returns

No legal approval

No Transparency

No good Third Party Audit

Not Clean Business Model

When asked questions get irritated

They do not have answers to legal queries.

How to Protect Yourself from Investment Scam

Verify legal Approval from concerned authorities.

The third Party Auditors

The Transparency

The Directors and their Credentials

Business Models and Success stories of similar Business.

Investment Documentation and their Legal Status and Legal Registration

Why Do Common Man Invest in Easy Money?

  • My friend getting good returns. (Known Person Theory)
  • Local Presence
  • Media and Promotion
  • Extensive Network and Flashy Adds
  • Big Promises
  • Regular Returns
  • High Returns


Scams