5 questions that will save you savings or how to detect investment fraudsters
This situation has happened to me many times. I got a call from an unknown number, I picked it up. In a call a girl with very pleasant voice told me that she is calling from the investment company XandY. Sometimes they also mention that my friend, whom I haven’t seen in years, gave them my nuimber, and they would like to offer me this opportunity, which will be here for a few days, because I am a smart person and I may be interested in it. The shares of a famous company are now low and, in addition, they want to pay their shareholders a fat dividend in a few days. I smelled a rat so I asked her a few questions after few minutes I was sure that I am dealing with very fishy company. And so I told her, your company’s offer sounds very interesting, but I have one more question: Before you called me, you did you sing, “tuududu tuududu tuududu” like from the movie The Wolf of Wall Street? And that was basically the end of the conversation because I knew that if I continued with it and did everything they wanted, that would be the last time I saw my money.
So what questions should you ask yourself before entrusting your money to someone? So how do you detect fraudsters with a few questions?
First. If voice in call sounds like robot and informs you that she is from NHS, HMRC or bank you don’t even have account with. Just hang up straight away. If NHS, HMRC or Bank has something important they usually send letter or email. Or have a real person to deal with their customers.
Question number one:
If I buy shares through you, will I be able to attend the General Meeting as one of the shareholders?
As a shareholder, you become the owner of the company and are entitled to participate in the management of the company. If a pleasant voice on the phone explains to you that this is not possible with them, know that they are more interested in the contents of your wallet than providing to you a real access to the stock exchange.
Will I receive a dividend?
As a shareholder, you are entitled to a share of the profits or a dividend if the company pays it. Not every company does that. For example, Tesla, Netflix, Moderna do not pay dividends. But companies like Microsoft, Apple, and Coca-Cola do. So if they give you excuse or explanation why you will not see any dividend in your life with them, it is probably some unregulated offshore company that does what it wants. Like take your money and buy trip to Maledives for their owners.
We offer CFD …
Okay CFD or Contract For Difference is NOT illegal … in Europe. But in America and Hong Kong, CFDs are banned. More specifically, Americans are not even allowed to trade with them abroad. And they have very good reasons for that. CFDs can be risky due to low regulation and potential liquidity shortages. Basically, imagine if I say: Verizon’s stock is now trading at $ 57. I don’t have any, but give me $ 57, and if one day you come to me and say you want to close a trade, I’ll give you as much money as Verizon’s stock will cost at that time. Minus the fees because you have to pay me for entering orders into my system. That, if you’re lucky, of course, because if you’re unlucky, I’ll tell you, “Uuuuu, unfortunately, no one wants to buy these shares from me right now. So hold the line. ”Where would you send me with such an offer?
Is your company listed in FCA register?
Almost all financial activities must be authorised by the Financial Conduct Authority or FCA in UK. FCA is the conduct regulator for almost 60 000 financial services firms. It tries to protect customers and enhance the integrity of UK financial system. In short. You definitely want the company that has your hard-earned money in its hands to be regulated by the FCA.
Do you also offer a leverage so I can earn more?
This is a catch. The leverage is a dangerous thing. You can earn more if the market goes in the right direction, but it can also zero you out quickly if it moves in other direction. We were taught at the University that the 1:10 leverage is dangerous. So when the guy on the phone boasted to me that they offered a 1:400 leverage… To understand what leverage 1: 400 means. Let’s say I want to buy shares that are worth 20 pounds and I want to invest 1000 pounds. Normally I could buy 50 of them, but with such high leverage, I will get 20 000. If the price rises by 5% to 21 pounds, I would normally earn 50 pounds, but thanks to such a huge leverage, it is 20 000, which is a very decent income for such a low investment. But if the price before it reaches 21, moves even a second down to 19.95 then it means a loss of 1000 pounds. Because you do not have coverage, the broker will immediately close your position and you are zeroed out. Of course, dubious companies will never let you into the real market. All trading takes place through their platform and you can never prove that that little move in the wrong direction was just in their system, in order to zero you out.
After those words, I ended the call very quickly. I had my hand on my wallet all the time for safety, just to be sure if he could steal over the phone.
It is not difficult to identify real fraudsters. They will usually push you to make a decision at a given moment, to an opportunity that will be here only few days, without you being able to think it over or consult with someone. Remember, the answer in such circumstances is always “No”. Opportunities on the stock exchange are like the reflections on a lake. None lasts forever, but until one opportunity disappears, another 10 will show up.
These were the questions I ask when someone calls me that they have a PERFECT opportunity to make money for me. Gently caress the Like button so it is not sad, and if you have questions you ask to filter out scammers, please write them in the comments. I am interested in all of them and they will also help others.
Thanks for watching this video.