Here’s an excerpt from a great, comprehensive article written by Aussie Stock Forums on how to identify an investment scam. Well worth a read! :

“Over the years, many people have arrived at ASF with questions about various “investment” businesses that have cold called them, and given them a sales pitch filled with promises of high returns with very little effort or risk. In many cases these people are told that they will be able to quit their job and live a leisurely life spending as little as 30 minutes a day trading financial markets. All they have to do is hand over a four or five figure upfront membership fee and the company will sell them black box software or send them index trading, or forex alerts that will enable them to earn a substantial income. In many cases the promises are not so elaborate and fanciful, but the sizable upfront fee and promises of far above average returns are always part of the sales pitch. Whatever company it is will always have the proverbial goose that lays golden eggs.

All of these businesses are investment scams. They are selling dreams, not reality. You will not only lose your sizable upfront membership fee, but more than likely whatever money you trade based on their alerts, or buy signals generated by their black box software. Once they have your membership fee they don’t care whether you make any money. They have already made theirs, and their aim will be to keep the scam going for as long as possible, and rip off as many people as they can before it all falls over and they are forced to close up shop and disappear.

Here are some things to look out for if you are concerned that a company you are dealing with may be an investment scam: click here to read the full article