Take time – check the facts – be on your guard – diversify

Every financial transaction has its risks. Fraudulent and unauthorised providers often operate in the financial market, hoping to make some fast money at the expense of investors. Ten simple rules shorten the odds of falling prey to fraudsters.

Better safe than sorry, even (or especially) when your money is at stake. The promise of astronomical returns is designed to lure investors into parting with their cash. So be on your guard if the offer sounds too good to be true.

Often these products involve embezzlement or fraud such as Ponzi schemes with their promise of huge rewards. Initially, to build confidence, investors might actually receive handsome payments, only to find that their money has gone for good.

By following ten simple rules, you can minimise the risk of being a victim of fraud:

  1. Take your time to decide where to place or invest your money. Never let anyone put you under pressure.

  2. Before you invest, make a few enquiries about the provider and the products. Never be dazzled by glossy brochures or sophisticated cold calling. Browse the web for information.

  3. Check whether the provider has been authorised by FINMA. Lists of authorised institutions can be found on our website. Be aware, however, that not every company authorised by FINMA is monitored closely and extensively.

  4. Make sure the provider is not on FINMA’s warning list. If they are, proceed with caution.

  5. Look up Swiss providers' data in the Commercial Register by checking the Central Business Names Index. Frequent changes to the company name, address or authorised signatories should ring alarm bells.

  6. If the provider or product is based abroad, always find out who you can contact if there is a problem. How would you enforce any claims, against whom, and what would it cost?

  7. Look at the chat forums and consumer websites on the web. Any signs that investors are worried or have lost money need to be taken seriously.

  8. Compare the products, fees and predicted returns with those of other providers. Be especially cautious if what you were offered is much better than comparable products from institutions authorised by FINMA.

  9. Never put all your eggs in one basket. Spread your financial investments around a variety of products.

  10. Remember this fundamental rule: big opportunities always come hand in hand with big risks. Often, you are more likely to lose money than to make it quickly.