If you’re looking to start making a little extra cash, or maybe grow some capital for your business, investing in stocks and shares is one of the best ways to do that; as long as you know what you’re doing. Unfortunately, many people make the mistake of investing in illegitimate businesses, and they eventually get scammed out of their investment.

This actually happens a lot more than we’d like to think, because these scammers will try to trick entrepreneurs like you and I with guarantees of low-risk and high reward shares that will guarantee us a return on that investment. These scammers have become very good at honing their craft, and that’s why it’s more important now than ever to be able to identify them. Keep reading to find out how you can avoid these investment scams when buying stocks and shares online.

Do Your Research:

Probably the most important and most obvious ways to protect yourself from online investment fraud is to do some research on the company you’re thinking of buying shares from before you actually pay them. Don’t just read what they have to say on their website and online message boards. You need to do a proper search for legitimate articles written by reputable, high-authority websites and browse for news articles or posts talking about the experiences with the company in question. Don’t be vague with the details. If you decide to invest in something, and you later find out your capital isn’t going where you intended, you’re at least partially to blame. Fortunately, there are services like those provided by PayBack, that will help you recover funds from stock market scams; regardless of the circumstances.

Ask Questions:

It’s important to ask the right questions to the company you’re considering investing in. If they seem reluctant or like they’re giving you the runaround or are being evasive, you should take this to be of concern. These scammers are banking on the fact that their victims will not be proactive or discerning, so make sure you’re both of those things. It might deter them since they’ll feel you’re on to them, and they’ll probably move on to an easier target. I would suggest preparing some key questions you’d like to ask them in your next discussion.

Know What the Red Flags Are:

By knowing what red flags to look for in an online investment scam you’ll be able to protect yourself from falling victim to one. So, what are these red flags to look out for? For starters, if things seem like they’re too good to be true, they probably are, okay? These scammers will make you offers that seem like amazing deals, like those low-risk/high-reward investments. Another thing they do is use terms like “guaranteed return on investment”. Remember, there’s no such thing as “guaranteed” when it comes to the stock market, so that right there is a red flag telling you they’re deliberately and unlawfully misleading you. Another red flag to look out for is if the sales rep is being too pushy with you. All they want to do is rush you and make you feel anxious so you can forget to ask questions about their legitimacy.

Study The Sales Rep:

Always listen to your instincts when dealing with an online sales rep. If something feels off and sketchy about them, don’t forget that – regardless of how trustworthy they might seem at the moment. You need to watch out for the “Halo Effect”. Don’t be fooled; even the sales rep presents themselves as credible and charismatic, you still need to check them out.

I hope these tips will help you avoid online scams that come your way in the future. Always remember, that you can never be too cautious, especially when it comes to your money.