When investors make investments, one of their primary concerns is risk. Although exposure to risk begins with the collection of investing information and performing due diligence, it remains a concern for investors long after they have made an investment. Unbeknownst to much of the investment community, it is financial predators who pose the greatest threat to the safety of their money.
There are nefarious individuals and organizations that will target investors with investing offers that compare well to their existing investment portfolio, but are slightly more appealing. Since these targeted investors have demonstrated the confidence to pursue investments, they are considered much easier to prey upon. This is a phenomenon referred to as successive approximations.
In successive approximation, each successive step towards the desired behavior is identified and rewarded. The series of rewards for different steps of the behavior increases the likelihood that the steps will be taken again and that they will lead to the desired end result being fulfilled. – Darcie Nolan
These financial predators identify their targets by acquiring lists of a company’s current investors. These are often acquired through the Black Market or “underground.” Once they have established that someone has already made an investment, and they have so far been rewarded by good returns, they will manufacture investment offerings that improve on the investor’s investing experience. This is done by offering incentives, such as a free vacation, as well as by promising better returns and/or lower risk.
To further add to their guise, some predators will assume (steal) the identity of a reputable financial firm or organization. This identity theft is done with the intention of increasing their own credibility in the eyes of the targeted investor, and is yet another attempt to mislead the investment community.
Identity theft is the deliberate use of someone else’s identity, usually as a method to gain a financial advantage in the other person’s name. – Wikipedia
In most instances, making an investment is a long-term commitment for both the investor and investment provider. This relationship is supported by well-established trust that is the envy of financial predators. The continued risk to investors is that, to their own gain, criminals will use aspects of this relationship to manipulate and fool people. Whether it is a similar offer, an incentive like a free trip, better returns, or lower risk, their intention is to mislead the investment community and bilk them out of their savings. Investors BEWARE.