Over the years, online investment has emerged as one of the most lucrative and stress-free investment schemes. This is because online investment is not limited by geographical location. As it requires no physical presence of the parties involved.

But despite its alluring and enticing nature, it is often characterised by a series of scams and frauds both on small and large scales. 

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Below are some of the common online frauds and their meaning;


Sending out lots of emails in the hope that one person will fall for it and reply with personal financial information.


Fraudsters hack into the email address of friends or professionals that you deal with and send you fake messages asking you to put money into their account.


Fraud using Twitter to gain personal information by pretending to be someone you know.


Voice-activated or telephone fraud where scammers ring up pretending to be from a bank or financial institution.


Fraud using text messages to get personal information.

Online investment

Investment scams typically involve fraudsters persuading a potential investor to part with money for fictitious funds or a fake investment in assets such as gold, wine, forestry schemes, cryptocurrency or land banks. 

For example, a “land banking” scheme might see investors enticed into buying a plot of land often in a far-flung location, on the promise of soaring values once planning permission is granted. Yet such licences are seldom given and investors are left holding worthless assets.

Practical ways to avoid getting scammed

Verify The Investment Is Registered

400″>Legit investments are often registered by appropriate organizations in charge of their activities. Corporate Affairs Commission, is one of such organizations which registers business bodies in Nigeria.

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Always Ask Questions and Get Straight Answers

If you want to know about a financial investment opportunity or other product, don’t be afraid to dig around for information on it. Ask the company or sales agent selling it direct questions and always get straight answers from them. If you’re not quite getting the answers you want, ask verified financial experts if they know the company or agent.

Watch Out for Small, Free Gifts – Online Investment 

Sometimes the biggest trap a scammer can set is by giving their victims something free or special to go with the product they’re selling. This can have investors feel they’re being cared for and they will be more eager to trust the company offering the pitch. Sometimes legitimate companies offer perks too, but no matter what, you still need to make sure you do adequate research on their products.

Avoid low-risk investment with high-profit returns

Any investment that promises you a quick profit is most likely going to be a scam. This is one of the methods used in alluring unsuspecting individuals. Always be sceptical of any too good to be true proposals. There is no such thing as a zero-risk investment.

Be suspicious of any investment demanding urgency

Any investment plan that requires you to invest immediately without proper scrutiny is an indicator that it is likely not genuine. Fraudsters often coerce their victims into making quick payments. It’s a trick to dupe you before you even realize it.

Watch Out For Social Media and Email Postings

Since we are social creatures and sites like Twitter and Facebook show it. However, “with this tremendous popularity comes a dark side as well. Virus writers and other cybercriminals go where the numbers are—and that includes popular social media sites.” 

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If you’re getting emails telling you that you should be investing in something you’ve never heard of or if you see banners on Facebook about a big money-making opportunity, you should probably stay away from it. Even if you see the headline that someone famous is doing it, stay away. 

Scammers often like to try and make their pitches look like real news.

Always consult a third party

If you are interested in the investment, take the time to talk with a third party, disinterested person. Talk to your regular stockbroker, your attorney, your accountant, or any other reputable consultant.

Be wary of unsolicited offers

Be careful especially if you receive an unsolicited pitch to invest in a company, or see it praised online, but can’t find current financial information about it from independent sources. It could be a “pump and dump” scheme. Be wary if someone recommends foreign or “off-shore” investments. If something goes wrong, it’s harder to find out what happened and to locate money sent abroad.

Think twice before you share your details; 

 In particular, your full date of birth, address and contact details — as all of this information can be useful to fraudsters. Deactivate and delete old social media profiles.

Destroy receipts with your card details and post them with your name and address so fraudsters cannot clone your identity.

Fraud is everywhere with investment advertising as well as other services and pitches to start up your own business in a multi-level marketing scam or similar schemes. Now, don’t just write off every investment opportunity that comes up as a scam because there are some legitimate, very high return investments out there including penny stocks that could help you. But you should keep in mind tips such as those pointed out by this article to avoid investment fraud.

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What to do once you feel you have been scammed

The first thing to do if you think you have been a victim of fraud is to report the incident to your bank as quickly as possible, says Mr Mills. Your bank will in turn contact the bank that received the stolen funds. If this happens rapidly enough then some of the funds in the criminal’s account could be frozen and recovered.

It is important to know what to say when you speak to your bank, she adds. Victims should demand to speak to a member of the fraud team and explain they have been a victim of bank transfer fraud or an authorised push payment scam.


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