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How to Avoid Investment Scams

Not all investment opportunities are what they seem. This guide shows you how to spot red flags, avoid fraud, and protect your money—so you can invest with confidence and peace of mind.

Woman looking at her cell phone, suspecting an investment scam call
i Did you know? Americans lose billions each year to investment scams—most start with a phone call, text, or email that seems legitimate.
✔ Reviewed by Money Fit Team Updated July 2025
Quick Facts About Avoiding Investment Scams
  • Scams often promise high returns with little or no risk—real investments always carry some risk.
  • Fraudsters may use fake credentials, urgent language, or “exclusive” opportunities to pressure you.
  • Most investment scams start with unsolicited contact: cold calls, emails, or social media messages.
  • Legitimate firms are registered with the SEC or your state’s securities regulator—always check before investing.
  • If it sounds too good to be true, it probably is—never send money or share info without researching the opportunity.

How to Avoid Investment Scams: Step-by-Step

  1. Be Skeptical of Unsolicited Offers
    Ignore investment opportunities from strangers, especially via phone, text, or social media.
  2. Check Credentials
    Verify that the company and advisor are registered with the SEC or your state’s securities regulator.
  3. Look for Red Flags
    Watch for promises of “guaranteed” returns, secret opportunities, or high pressure to act quickly.
  4. Research Before Sending Money
    Search online for the company’s name plus “scam” or “complaint.” Read reviews and see if regulators have flagged the firm.
  5. Never Share Personal Info or Money Right Away
    Don’t provide your Social Security number, bank info, or make payments without thorough research.
  6. Ask Questions—and Get Answers in Writing
    Scammers dodge details. Real professionals are happy to explain fees, risks, and how investments work.
  7. Trust Your Instincts
    If something feels off or you feel pressured, walk away—there are always other opportunities.
  8. Report Suspected Scams
    If you spot or fall victim to a scam, report it to the SEC, FINRA, or your state’s securities regulator to help protect others.

What to Expect When Watching for Investment Scams

  • Scams can look very convincing: Fraudsters may use real-looking websites, professional emails, and fake testimonials.
  • You may feel pressured: Scammers use urgency and “limited time” offers to rush your decision.
  • Legitimate firms welcome your questions: If you feel dismissed, pressured, or shamed for asking, walk away.
  • Reporting scams helps others: Many agencies investigate and shut down bad actors based on consumer reports.
  • It’s okay to say no: No real investment requires you to act on the spot. Taking your time is a smart, safe move.

Pro Tips & Common Mistakes to Avoid

  • Don’t trust “guaranteed” returns: All investments have risk. Be wary of anyone promising a sure thing.
  • Slow down before sending money: Scammers count on you acting fast—take your time and check credentials.
  • Double-check email/web addresses: Fake websites often look real but may have small spelling errors or odd URLs.
  • Don’t invest based on a friend’s word alone: Even well-meaning friends can be fooled or recruited by scammers.
  • Save all communications: Keep records of emails, texts, and calls—these help if you need to report a scam.

How DeShawn Dodged an Investment Scam

DeShawn, a 38-year-old teacher in Atlanta, GA, got a message from someone claiming to be a financial advisor with a “can’t-miss” crypto investment. The advisor promised fast, guaranteed returns and pushed DeShawn to act that day.

Feeling suspicious, DeShawn searched the advisor’s name and company online. He found warnings on the SEC website and complaints from other consumers about similar pitches.

Instead of sending money, DeShawn blocked the scammer and reported the message to the SEC. He later shared his experience with friends and family so they could watch out, too.

The result? DeShawn kept his money—and helped protect others from falling for the same scam.

Frequently Asked Questions

What are the warning signs of an investment scam?
Watch for promises of high, guaranteed returns, pressure to act fast, secrecy, unregistered firms, and requests for personal or financial info up front.
How can I check if a company or advisor is legitimate?
Search for them on the SEC’s Investor.gov or with your state’s securities regulator. Never rely on what the “advisor” tells you.
What should I do if I think I’ve been scammed?
Stop all communication, save all messages, and report it to the SEC, FINRA, or your state regulator. If you sent money, contact your bank or card issuer immediately.
Can I get my money back from an investment scam?
Sometimes banks or credit card companies can help if you act quickly. Unfortunately, funds sent by wire or crypto are often hard to recover.
Are all unsolicited investment offers scams?
Not all, but most are. Be extremely cautious with any “opportunity” you didn’t seek out yourself.
Where do I report investment scams?
Report to the SEC, FINRA, and your state securities regulator. Sharing details can help prevent future scams.

Questions About Managing Your Debt?

We’re not investment advisors, but our nonprofit counselors can help you build a solid foundation by tackling debt and answering your questions about saving and financial wellness. If you want to explore your options, be sure to reach out.

Get a Free Debt Review Session
Prefer to talk it out? Call us at (800) 432-0310
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About the Author

Rick Munster is a personal finance expert and author with over 23 years of experience in the credit counseling industry. He currently serves on the board of directors for the Financial Counseling Association of America and has published more than 250 articles on personal finance. Over the course of his long-standing career at Money Fit, a nonprofit credit counseling organization, Rick’s insights have been featured by several news outlets on topics such as credit counseling, debt management, and financial education.

Read Rick’s full profile

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You hereby authorize and instruct Debt Reduction Services, Inc. (DRS, dba Money Fit by DRS) and/or its assigned agents to:
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NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

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Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to DebtReductionServices.org for details of our services.

  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
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You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

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NOTE: If you have an impairment, disability, language barrier, or otherwise require an alternative means of completing this form or accessing information about our counseling services, please communicate with your DRS representative about arranging alternative accommodations.

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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

No Client Obligation

The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.
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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

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Housing Counseling and Education Fee Schedule  

Online EDUCATION Program Fees* 

eHome Homebuyer Education Course: $99 per household** 

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours) 

Online Workshops: $49 per participant 

  • Rental, Fair Housing, Predatory Lending Post-Purchase, HECM Family Member  
  • Approximately 1 hour each 

Other Self-Guided Financial Literacy Webinars: $0 

  • Credit, budgeting, homelessness prevention, debt prevention 
  • Approximately 30-60 minutes each 

One-on-one COUNSELING Fees* 

Pre-purchase Home Buying, Renter Issues, Homelessness, and Fair Housing: $0  

Post-purchase Ownership and Maintenance, HOEPA or Financial Management $75/hr  

Reverse Mortgage/HECM Counseling with Required Certificate $200 per household†  

Credit Report Fee Paid Directly by Client 

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable 

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page 

**Household is an individual or a couple  
†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there)