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Red Flags of Fraud

We've all heard it before—"If it sounds too good to be true, it probably is." That's great advice, but the trick is figuring out when "good" becomes "too good." Investment fraudsters make their living by making sure the deals they pitch appear both good and true. Once they know which buttons to push, they'll bombard you with a flurry of influence tactics, which can leave even the savviest person in a haze.

Five Red Flags of Fraud

Learn to Spot and Avoid These Red Flags of Investment Fraud
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Tip Sheet: How to Spot the Red Flags of Fraud

View a one-page outline of the red flags of fraud, what they mean and examples of each. Find other helpful tools and resources.

Fraud Flag Videos

Share this series of short videos that explain the red flags of fraud.

Phantom Riches: Did you know there are five red flags of fraud that every investor should know? This video will help you understand one of them—phantom riches. It's when a con dangles the prospect of wealth in front of you, enticing you with something you seemingly can't have.

The following videos are coming soon:

  • Source Credibility
  • Scarcity
  • Reciprocity
  • Social Consensus

Stories of Victims and Cons

Anyone can be defrauded. Read stories and watch videos of victims and cons—and how fraud affected their lives.

Take a Peek Into the Con's Playbook

Investment fraud criminals are masters of persuasion, tailoring their pitches to match the psychological profiles of their targets. They ask seemingly benign questions—about their target's health, family, political views, hobbies or prior employers—to identify the best ways to separate victims from their money. Watch the video below to take a peek into the con's playbook.

Learn more about the red flags of investment fraud by watching the FINRA Foundation documentary, "Trick$ of the Trade: Outsmarting Investment Fraud."