In today’s digital age, scammers are leveraging advanced technology to craft sophisticated schemes that can easily deceive even the most cautious individuals. With enticing promises of quick and high returns, these fraudsters exploit the common man’s vulnerability for becoming rich.

These fraudulent schemes often play on human emotions like greed and fear, leading individuals into traps that can be disastrous effects on your finances. Your hard earned savings can be depleted within few moments! Staying vigilant and informed is your first line of defence.

Let’s learn how to identify and avoid these investment scams.

• Understanding the lure of investment scams

Scammers create well-packaged schemes, claiming unrealistic returns and pressuring potential investors into making quick decisions. Their tactics often include:

1. Promises of guaranteed returns.
2. Lack of clarity on fees and commissions.
3. Use of unverified apps or platforms to fake legitimacy.

These red flags are warning signs that every investor should be aware of before committing their hard-earned money.

• How to spot an investment scam

1. Unrealistic guaranteed returns

Scammers often claim to have “foolproof” investment strategies that yield high returns within short timeframes. These claims are designed to create a false sense of security.

Pro tip - Successful investing requires patience and thorough research. Be wary of any scheme promising guaranteed results, as legitimate investments carry an inherent level of risk (As a matter of fact, only fixed deposits and bonds are investment options that come with assured returns)

Transparency is a hallmark of trustworthy investments. Scammers deliberately withhold critical information, such as hidden charges, commissions, or the nature of the investment.

Pro tip - Always demand clear and transparent documentation. If a scheme seems overly complex or vague, it’s best to walk away.

3. Unsolicited apps

Fraudsters may push investors to download unverified trading apps that display fake profits or account balances, giving a false sense of success.

Pro tip - Only deal with licensed brokers and download apps from official, verified sources. Avoid engaging with apps or platforms promoted via cold calls or unsolicited messages.

• The importance of research

Building wealth through investments requires knowledge, discipline, and a long-term mindset. Here’s why research is essential:

1. Understanding the market - Familiarising yourself with the basics of investing can help you recognise fraudulent schemes.
2. Consulting experts - Seek advice from financial advisors or credible institutions.
3. Validating claims - Use regulatory websites and official platforms to confirm the legitimacy of investments and brokers.

• Leveraging technology to safeguard your finances

Tools like the e-Lock facility in SIB Mirror+ App by South Indian Bank offer enhanced security features, such as a single-toggle lock for your account. These features provide an added layer of protection against unauthorised transactions.

• What to do if you suspect fraud

If you encounter suspicious communication or offers, take immediate action:

1. Avoid engagement - Do not respond to unsolicited messages or calls.
2. Report the incident - Reach out to authorities, such as the National Cyber Crime Portal (1930), for assistance.
3. Contact your bank -  Inform your bank immediately and secure your account.

• Final thoughts

Scammers thrive on impulsive decisions driven by greed or fear. By staying informed, conducting thorough research, and leveraging secure banking tools, you can protect yourself and your finances from falling prey to fraudulent schemes. Remember, investing is a marathon, not a sprint.

For any concerns or suspicious activity, contact South Indian Bank's 24/7 Customer Care at 1800 425 1809 / 1800 102 9408 or email customercare@sib.co.in.

Stay informed. Stay protected. Smart investing starts with cautious decisions.

Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.