Internet Investment Fraud

The widespread use of the Internet has provided fertile ground for a number of different kinds of investment fraud. Many of these crimes involve making false or misleading statements about how people can invest their money or get involved in risky activities like online forex trading.

Furthermore, the perpetrators of such crimes have recently obtained a much broader audience by using the Internet both to commit them and also to find new potential investment fraud victims.

Basically, the growing and largely-unregulated use of the Internet provides ample opportunity for fraud perpetrators to spread false information about investments. Accordingly, you need to be very careful when considering placing money at risk based on anything you read online.

The Internet can Facilitate Investment Fraud

For example, the Internet provides fraud perpetrators with the ability to contact wide online audiences that visit websites and online discussion forums. In addition, the use of unsolicited e-mail communications or "spam" provides another means for scammers to reach potential investment fraud victims.

Often, they will focus on pumping up the value of thinly-traded penny stocks they already own. Some websites set up by investment fraud perpetrators might offer investors Ponzi schemes under the guise of a High Yield Investment Plan or HYIP.

Common Types of Internet-based Investment Scams

Scammers using the Internet to commit their investment fraud crimes typically do so in a variety of ways. For example, they might set up false investment websites, make false posts to discussion forums, chat rooms, newsgroups and message boards, and send unsolicited spam e-mails to potential investment fraud victims.

General examples of types of this kind of Internet-facilitated investment fraud might include:

• Online or e-mailed newsletters that claim to be offering unbiased information but which are actually actively promoting the purchase of a stock or other investment security already owned by the writer.
• Bulletin board or discussion forum postings that purport to be from people with inside information and which give the false impression of conditions that should lead a stock's price to rise or fall.
• Unsolicited spam e-mails sent directly to potential investors by the fraud perpetrator that falsely promote or disparage a particular stock's prospects.
• Websites that claim to offer attractive High Yield Investment Plans but are in actuality false and misleading covers for a Ponzi scheme.

Avoiding Being Conned by Internet-based Investment Scams

Perhaps the best way to steer clear of Internet-based investment scams is to double check just about anything you read about online that seems like investment advice or that seems to solicit your investment in a particular plan. Also remember that if something looks to good to be true, then it probably is and so should be avoided.

Furthermore, since online sales pitches can be very persuasive, keep your eyes wide open and always think twice when reviewing any Internet-transmitted investment suggestions or proposals.

Another good idea is to generally refrain from acting on information contained in unsolicited e-mail messages or from following links found in such messages, as they can lead to questionable websites that may try to steal your personal information, as well as your investment funds.

Basically, while the Internet can provide a very useful means for investors to research potential investments, it can really pay to do your homework before placing your money with an investment opportunity you find via the Internet.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.