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Stay the course · Lesson 11 of 11

Investment Scams and Your Simple Investing Plan

Learn the warning signs of investment scams, how to check a firm on your regulator's register, and a seven-step plan to follow.

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THE WRITTEN LESSONFollow along at your pace

In this final lesson you will learn how to spot investment scams. Then you will put everything from this course into one simple plan that you can tick off, one step at a time.

A big problem

Investment scams cost people a fortune. In the US, people reported losing almost 16 billion dollars to fraud in 2025, and about half of that was investment scams. And those are only the losses people reported.

A stack of banknotes beside the words 16 billion dollars reported lost to fraud, US, 2025, and a smaller stack marked About half, Investment scams. A label says Only what was reported.(opens the full-size picture)
About half of the reported fraud losses were investment scams.

The warning signs

Most scams share the same warning signs:

  • They promise big returns with little or no risk.
  • They contact you out of the blue.
  • They push you to act quickly.
  • They ask you to keep it secret.
A special offer card reading Guaranteed 20 percent a month, No risk, stamped SCAM, beside four crossed warning signs: No risk, big returns; Out of the blue; Act now; Keep it secret.(opens the full-size picture)
A made-up offer with its four warning signs.

No risk is the red flag

Every real investment carries some risk. So a promise that returns cannot fall is the biggest red flag of all. Some scams even let you take out a little money at first, to win your trust before you put in more.

A card where the claim Guaranteed returns, no risk is crossed out and replaced by Every real investment has some risk. A red label says The biggest red flag: no risk, and a hook above a wallet is labeled A small payout to win your trust.(opens the full-size picture)
A small early payout can be bait.

A second trap

If you have already lost money, watch out for a second trap. So-called recovery firms offer to get your money back for a fee. These are scams too. If this has happened to you, report it to your national fraud service instead of paying.

A phone showing a message from a recovery firm that says We can get your money back, Fee 500 dollars, beside the question Pay a fee to get your money back? and a stamp reading RECOVERY SCAM.(opens the full-size picture)
Being asked for a fee up front is the warning.

Check before you pay

Before you hand money to any firm, check it on your financial regulator’s official register. In the US, you can use Investor.gov or FINRA BrokerCheck. In the UK, use the FCA’s register. Elsewhere, find your national regulator. And if something feels wrong, report it.

For example, search for a firm by name. If “XYZ Investments”, a made-up firm, is not found on the register, do not pay.

A regulator register search box with XYZ Investments typed in and the result Not found: don't pay. Below are the US (Investor.gov, FINRA BrokerCheck), the UK (FCA register) and Elsewhere (your national regulator), plus a note: Feels wrong? Report it.(opens the full-size picture)
Search the register yourself, and never use contact details from the offer.

Not on the register?

A firm that is missing from the register is a reason to walk away, not a reason to ask the firm why. Look up the register yourself, rather than using a link or phone number the firm gives you.

Your simple plan

Now put the whole course together. Seven steps, in order:

  1. Build a cash cushion.
  2. Pay off expensive debt.
  3. Match your money to when you will need it.
  4. Use tax breaks and any employer match.
  5. Spread your money widely at low cost.
  6. Invest regularly and leave it alone.
  7. Check who you are dealing with, and review your plan once a year.
A card headed My investing plan with seven ticked steps: Build a cash cushion; Pay off expensive debt; Match money to when you'll need it; Use tax breaks and employer match; Spread widely at low cost; Invest regularly, leave it alone; Check the firm, review yearly.(opens the full-size picture)
Seven simple steps, one at a time.

This course is general education, not advice. Every real investment carries some risk, and past results do not predict the future. For decisions about your own situation, talk to a regulated adviser.

YOUR TURN

My simple investing plan

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Read the full lesson script

In this final lesson, you'll learn how to spot investment scams. Then you'll put everything from this course together into one simple plan.

Investment scams cost people a fortune. In the US, people reported losing almost 16 billion dollars to fraud in 2025, and about half of that was investment scams. And those are only the losses people reported.

Most scams share the same warning signs. They promise big returns with little or no risk. They contact you out of the blue. They push you to act quickly. And they ask you to keep it secret.

Remember, every real investment carries some risk. So a promise that returns can't fall is the biggest red flag of all. Some scams even let you take out a little money at first, to win your trust before you put in more.

If you've already lost money, watch out for a second trap. So-called recovery firms offer to get your money back for a fee. These are scams too.

Before you hand money to any firm, check it on your financial regulator's official register. In the US, you can use Investor.gov or FINRA BrokerCheck. In the UK, use the FCA's register. Elsewhere, find your national regulator. And if something feels wrong, report it.

Now let's put the whole course together. First, build a cash cushion. Second, pay off expensive debt. Third, match your money to when you'll need it. Fourth, use tax breaks and any employer match. Fifth, spread your money widely at low cost. Sixth, invest regularly and leave it alone. And seventh, check who you're dealing with, and review your plan once a year.

So remember: every real investment carries some risk, so anything that promises otherwise is a warning sign. Check every firm on your regulator's register. And follow your simple plan, one step at a time. For decisions about your own situation, talk to a regulated adviser. As your final task, find your country's financial regulator register and bookmark it. Then fill in the plan on the lesson page. Congratulations, you've finished Investing Basics for Beginners.