How to Avoid Financial Scams: A Guide for Borrowers

At Fig, we prioritize the financial well-being and security of our borrowers. We understand the importance of making informed decisions and avoiding potential scams that could jeopardize your financial stability. To help you navigate through financial decisions safely, we have compiled a comprehensive guide on how to recognize and avoid investment scams. 

Always keep in mind that only the person applying for the loan carries any liability and if something sounds too good to be true, it just might be.

What is an investment scam?

You've been contacted by someone you maybe have never talked to before and they have an amazing investment opportunity. A "broker" or representative of a company will encourage you to take out a loan and invest the money, promising a high profit with a quick return. These individuals are very persuasive and encourage you to borrow money from Fig or other sources. They may tell you that you are not liable for the loan and that you don't want to miss out on this amazing opportunity. If any of this resonates with an experience you've had, please follow these steps to make sure you stay safe:

Am I being targeted by a scammer?

1. Conduct Thorough Research: Before investing in any opportunity, thoroughly research the company and the individual offering the investment. Look for information such as their track record, financial stability, and regulatory compliance. Be wary of investments that promise high returns with little to no risk, as they often turn out to be too good to be true.
2. Understand loan terms: Make sure you know exactly how the loan terms compare to what someone is telling you. It is not possible to transfer liability for a personal loan to another person or entity.
3. Verify Credentials and Licenses: Ensure that the individual or company offering the investment is properly licensed and registered with the relevant regulatory authorities. This information should be readily available upon request. Be cautious of individuals who are hesitant or unwilling to provide this documentation.
4. Watch Out for Red Flags: Be vigilant for common red flags that may indicate a potential scam. These include unsolicited investment offers, pressure to invest quickly, and promises of guaranteed returns. Additionally, be cautious of investments that lack transparency or have vague or overly complex terms and conditions.
5. Seek Professional Advice: Consider seeking advice from a qualified financial advisor before making any investment decisions. A professional advisor can help you assess the legitimacy of an investment opportunity and provide valuable insights tailored to your financial goals and risk tolerance.
6. Diversify Your Investments: Diversification is key to mitigating risk in your investment portfolio. Avoid putting all your funds into one investment or asset class, as this leaves you vulnerable to significant losses if that investment fails. Instead, spread your investments across different assets to minimize the impact of any single investment performing poorly.
7. Trust Your Instincts: If something feels off or too good to be true, trust your instincts and proceed with caution. Take the time to conduct thorough due diligence and consult with trusted advisors before committing any funds. Remember, it's better to miss out on a potentially lucrative opportunity than to fall victim to a scam.
8. Loop Someone In!: If you feel inclined to make a big financial decision, run it by a family member or close friend. An extra set of eyes or ears can be helpful, especially when it's someone who is looking out for your best interest.

Other Types of Scams

Cryptocurrency Scams

Cryptocurrency scams involve malicious schemes aimed at deceiving investors into investing in fake or non-existent digital currencies.

How to Identify

• Be cautious of offers promising guaranteed returns or quick profits with minimal risk
• Be cautious of being told that liability for the loan can be changed
• Scammers often use high-pressure tactics and fake endorsements to lure victims into investing

Phishing Scams

Phishing scams are fraudulent attempts to obtain sensitive information such as personal identifiable information (SIN, date of birth, address, etc), passwords, usernames, and credit card details by posing as trustworthy entities.

How to Identify

• Watch out for suspicious emails, messages, or websites requesting personal or financial information
• Phishing emails often contain grammatical errors, urgent requests, and generic greetings.

Advance Fee Scams

Advance fee scams require victims to pay upfront fees in exchange for promised rewards, such as lottery winnings or loans, which never materialize.

How to Identify

• Be skeptical of offers requiring payment before receiving goods or services
• Scammers may pressure victims into paying quickly and offer convoluted explanations for the fees

At Fig we are committed to empowering our borrowers with the knowledge and resources they need to make informed financial decisions. By following these guidelines and staying vigilant, you can safeguard yourself against investment scams and secure a brighter financial future.

Remember, your financial security is our top priority, and we are here to support you every step of the way. If you have any questions or concerns regarding investment opportunities or financial matters, don't hesitate to reach out to our customer support team for assistance.

We do our best to provide useful information. However, we cannot guarantee that the information is complete, accurate, up-to-date or otherwise reliable for any particular purpose. This article is provided to you as information only and not as advice tailored to your reality.