Basics Beginner: Understanding and Avoiding Fraud and Scams

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1.
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.
2.
Scammers who target the elderly usually come across as _______.
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Likable. Scammers who target the elderly put on a positive face. Many elderly find it hard to turn down someone in need.
3.
Telephone swindlers demand immediate compliance from their victims because _______.
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Both of the above. Swindlers don't want their scams to be exposed.
4.
What does a romance scammer usually try to get first, before coming after your money?
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A connection with you. Romance scams require that the victim develop a feeling of connection with the criminal; this makes it harder to refuse him or her.
5.
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.
6.
Why might a work-at-home job in which you reship items you receive in the mail to others be a scam?
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The items might actually be stolen. Reshipping is often a cover for sending stolen items.
7.
A blockchain is a transparent ledger of _______ transactions that anyone can view.
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Transactions. Blockchains maintain a decentralized, secure record of transactions.
8.
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.