No one is immune from financial scams – they are everywhere and con artists are very good at what they do. Thankfully, there are ways to protect your assets and decrease the likelihood of experiencing one.
Making smart investments is the best way to protect your assets. Before we look at how investing does that, let’s look at the three more common types of financial scams so you can avoid them.
3 Types of Financial Scams
There are many methods people use to scam innocent victims out of money, but these are the three most common ones.
Identity Theft
With the proliferation of online shopping and bill paying, identity theft is surging in popularity. All it takes is someone finding your username, password, and personal details (like a birthday) and they are able to make charges to your accounts.
When someone commits financial identity theft, they might get a loan using your credentials or use an online shopping account to make large purchases.
Pure Trust Scam
Also known as “asset protection trusts,” these scams falsely promise people that any income earned in these trusts is not subject to gift or estate taxation. These scam artists try to manipulate people and instill fear of death taxes, saying their trust is the best way around them.
Anything that promises to help shield your assets from creditors or the IRS should not be trusted. There is no such thing as “pure trust.” People that invest in them will often find that they owe years of…
