Top 5 Biggest Financial Scams

The video tutorial discusses various financial frauds, including Ponzi schemes, pyramid schemes, pump and dump scams, IRS scams, and phishing. It explains how these scams operate and offers advice on how to protect oneself. The video emphasizes the importance of skepticism and verification when dealing with financial opportunities and personal information requests.

What is a key characteristic of a Ponzi scheme?

• It requires a large initial investment.

• Returns are paid using new investors' money.

• Investments are made in real estate.

• It involves selling physical products.

How does a pyramid scheme primarily generate returns?

• Through stock market investments.

• By selling products to consumers.

• Through government bonds.

• By recruiting new members.

What differentiates a multilevel marketing company from a pyramid scheme?

• MLMs focus on recruitment only.

• MLMs are illegal in most countries.

• MLMs require product sales for income.

• MLMs guarantee a fixed return.

What is the main tactic used in a pump and dump scam?

• Selling stocks at a loss.

• Artificially inflating stock prices.

• Investing in undervalued stocks.

• Buying stocks from reputable companies.

Which of the following is a sign of a potential IRS scam?

• Receiving a refund check.

• Being contacted by a tax professional.

• Being asked to pay taxes via wire transfer.

• Receiving a letter from the IRS.

What is phishing primarily aimed at?

• Investing in stocks.

• Obtaining personal information.

• Selling products online.

• Recruiting for a business.

What should you do if you receive a suspicious call asking for personal information?

• Provide the information immediately.

• Report the call to the police.

• Verify the caller's identity by contacting the company directly.

• Ignore the call and block the number.