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Basics Beginner: Understanding and Avoiding Fraud and Scams

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1.
Why are older people common targets for romance scammers?
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They usually have more assets than younger people. Older people can be prime targets because of their assets.
2.
Creating artificial demand for a stock and then selling it to make a quick profit is known as _______.
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Pump and dump. Pumping and dumping means creating artificial demand and then selling in order to gain from it.
3.
Why are pyramid schemes unsustainable by nature?
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There are never enough participants to keep the pyramids growing. They are a fast way for scammers to defraud others.
4.
Which of the following descriptions of a work-at-home job is most likely to be that of a scam?
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An assurance that anyone can do it. Of the choices, this one is the most likely to be from a scam.
5.
Why might a money-transfer opportunity require that you sign a non-disclosure agreement?
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To prevent you from discussing the deal with other people. This is a common tactic in investment fraud.
6.
Which of the following descriptions of an investment is a telephone scammer most likely to use?
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"Risk-free". Scammers often describe their investments as risk-free.
7.
Why are so many frauds tailored to the elderly?
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All of the above. Though these do not describe all elderly, they describe enough that criminals target them.
8.
When you send a cryptocurrency payment to another person, it is not reversible.
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True. Crypto payments are not reversible; to get one back, the other person would have to send it to you, which is not likely to happen if the person had defrauded you.