You spot a scam by its red flags, not by its disguise. The same traps show up in the Eiffel Tower sold as scrap metal in 1925, in Madoff's scheme and in the crypto platform texting you on WhatsApp today: impossible returns, pressure, secrecy, earning by bringing in others and proof produced by the seller itself. If you see even one, stop and check.
Scam checker: am I being scammed?
Answer a few questions about what you're being offered. We compare your answers with the red flags that repeat in history's biggest scams and give you a report on what we see and what to do. It runs only in your browser: we don't store or send anything.
- Are they promising high, guaranteed returns, “with no risk”? No real investment guarantees high returns. Baldomera Larra paid 30% a month in 1876 Madrid: as long as new money kept coming in, nobody asked where it came from.
- Are they rushing you: “today only,” “only a few spots left,” “decide now”? The rush is there so you don't check. At Stratton Oakmont, Jordan Belfort's salesmen worked from scripts designed to keep up the pressure until the sale closed.
- Do you earn more if you bring in other people? If the business depends on new people joining, it's a pyramid or a Ponzi scheme: the first ones get paid with the money of the next ones, just like in Charles Ponzi's Boston.
- Are they asking you not to tell anyone (family, bank, friends)? Secrecy isolates the victim. Victor Lustig convinced the scrap dealers that the sale of the Eiffel Tower was confidential, so nobody checked it.
- Is the only proof that it's real a set of documents, websites or certificates from the company itself? Gregor MacGregor printed a 355-page guidebook, a flag and currency for Poyais, a country that didn't exist. A pile of paperwork is no substitute for a single independent check.
- Is the company missing from FINRA BrokerCheck or the SEC's adviser search (US) or the FCA Register (UK), or does it appear on a regulator's warning list? If it isn't registered or authorized, no investor protection covers you. Allen Stanford sold from a bank in Antigua, out of reach of his clients' regulators.
- Are they using celebrities, influencers or “important people” to win you over? Someone else's fame proves nothing. Fyre Festival was sold with models and influencers, and on the island there was nothing. Today, celebrity videos can also be faked with AI.
- Are they showing you luxury and success (cars, trips, jets) as proof that it works? The luxury they show you may be paid for by the previous victim: that's how Simon Leviev, the Tinder Swindler, funded his private jets.
- Are they telling you it's a revolutionary technology you don't need to understand? Promise the future, and nobody audits the present. Theranos's machine never did what Elizabeth Holmes was selling, and OneCoin didn't even have a real blockchain.
- Are the results always good, month after month, without a single down month? If the numbers always add up, someone is making them add up. Enron reported growing profits quarter after quarter until 2001, and they were cooked. Madoff did the same for decades.
- Have you seen “profits” you can't fully withdraw, or are they asking you to pay to get them out? Getting some money back doesn't mean you're not being robbed: small payouts are there to make you put in more. At FTX, customers found out all at once that their money wasn't there.
- Is someone you've never met in person asking you for money? It's the number one rule of the romance scam: the relationship grows fast, there's never a real meeting, and in the end a financial emergency shows up.
- Is the urgency emotional: an accident, an arrest, a health problem? Fear switches off reason. That's why the scammer manufactures an emergency: so you pay before you think or call someone else.
- Are they writing from a new number, claiming to be a relative, your bank or a government agency? Impersonating someone you trust is the oldest trick in the book: Frank Abagnale boasted of passing himself off as a pilot and a doctor. Hang up and call the number you already know.
- Are they asking for codes or passwords, or asking you to install an app? No bank or legitimate company will ask you over the phone for the code they texted you, or ask you to install a remote-access program.
- Are they asking you to pay in crypto, with gift cards or by wire transfer to a personal or overseas account? These are payment methods you can't dispute or reverse. That's why scammers prefer them.
- Is the price much lower than anywhere else? The victim's greed does the con man's work: Lustig's scrap dealers wanted the Eiffel Tower at a bargain price.
- Are they asking you to pay up front outside the platform (Airbnb, Booking.com, eBay, Facebook Marketplace…) or through a link? Outside the platform, you lose its protection. Fake rental listings and cloned payment links work exactly like this.
- Do you have to pay to start working (training, materials, a joining fee)? A real job pays you. If you pay to get in and earn by bringing in others, it's a pyramid by another name.
- When you ask questions, do they get angry, flatter you or change the subject? People selling something real answer questions. When MMM's victims asked questions, Mavrodi turned them into defenders of his pyramid.
This checker gives guidance, not certainty: a scam may show none of these red flags. If in doubt, don't pay, and ask an official agency. MATERIUM will never ask you for money or personal details, and no one can “recover” your money in exchange for a fee.
The 10 red flags that repeat in the biggest scams
- High, guaranteed returns. Every real investment carries risk. Whoever guarantees you a high, fixed return is paying you with someone else's money: Baldomera Larra promised 30% a month in 1876 Madrid.
- Pressure. “Today only,” “last few spots.” The urgency is there so you don't check.
- Secrecy. “Don't tell your bank.” Isolation has been the con man's tool since Victor Lustig.
- You earn by bringing in others. If the money depends on new participants, it's a pyramid or a Ponzi scheme.
- Proof produced by the seller. The company's own websites, contracts and certificates prove nothing: Gregor MacGregor even printed the flag of a country that didn't exist.
- Not on the regulator's register. In the US, a broker or firm that doesn't show up on FINRA BrokerCheck or in the SEC's adviser search shouldn't be selling you investments; in the UK, a firm that isn't on the FCA Register isn't authorized to offer you that product.
- Celebrities and influencers. Someone else's fame doesn't protect your money, and today celebrity videos can be faked with AI.
- Luxury as proof. Cars, trips and private jets are often paid for with the previous victim's money.
- Payments you can't dispute. Crypto, gift cards, or wire transfers to personal or overseas accounts.
- Profits you can't withdraw. If they ask you to pay a fee or a tax to get your money out, it's the final stage of the scam.
How to check it in five minutes
- Look the company up in the regulator's register, not on its own website: FINRA BrokerCheck and the SEC's Investor.gov in the US, the FCA Register and the FCA Warning List in the UK.
- Search its name together with “scam” or “reviews” and look at results from news outlets and official agencies, not from the company itself.
- Call the official number yourself, of your bank or your relative. Never call back the number that contacted you.
- Tell someone. Explaining the offer out loud to another person takes apart many traps.
Why it works even when we know all this
Scammers don't attack intelligence; they target five human levers: greed, trust, authority, fear of missing out and shame. That's why doctors, bankers and experts fall for them too. Every MATERIUM episode ends with a Law of Deception that sums up how one of those levers was pulled in a real case. You can read them all in The Laws of Deception.
Frequently asked questions
How can you tell if something is a scam?
Look for the red flags that keep repeating: high, guaranteed returns, pressure to act fast, secrecy, earning by bringing in others, proof produced by the seller itself and payments you can't dispute. If you see even one, stop and check it outside the circle of whoever is offering it to you.
How do I check if an investment firm is legit in the US or the UK?
In the US, look up the firm or the person on FINRA BrokerCheck and in the SEC's adviser search on Investor.gov. In the UK, check the FCA Register and the FCA Warning List of unauthorized firms. Don't rely on the company's own website or certificates.
What should I do if I've already paid?
Call your bank today to try to stop the payment, keep all the evidence (messages, receipts, links) and report it: in the US to the FTC at ReportFraud.ftc.gov and, for online fraud, to the FBI's IC3; in the UK to Report Fraud, the service that replaced Action Fraud. Be wary of anyone who offers to recover your money for a fee: that's a second scam.
Does the scam checker store my answers?
No. It runs only in your browser: it doesn't store, send or log anything you select.
Sources
Educational content: not financial or legal advice. Before an investment decision, consult a licensed professional.