Guaranteed returns are a warning label
Checked
Investment pitches can reach you through ads, social media, and text messages. This piece covers the phrases that should make you stop, the fake trading platforms behind many scams, and how to check a person or firm in a few minutes before you send a dollar.
Talk about it at home: jump to the Kitchen Table Talk
Why fraud finds investors online
The SEC's (Securities and Exchange Commission's) investor site, Investor.gov, says the internet lets fraudsters reach a mass audience without spending much time or money, and that it's easy for them to make their messages look real and credible. On social media, it says, fraudsters can try to appear legitimate, hide behind anonymity, and reach many people at low cost.
Investor.gov also warns that if a promotion grabs your interest, you should research the "opportunity" even before giving out your phone number and email address. Otherwise, you may be setting yourself up to be targeted.
Do this now: The next time an investment ad catches your eye, don't fill in the sign-up form. Look it up first.
The words that should stop you
Investor.gov's red flags checklist names pitches that sound "too good to be true," "risk-free" opportunities, "promises of great wealth and guaranteed returns," "everyone is buying it" pitches, and pressure to invest right now. It also lists unlicensed investment professionals and unsolicited pitches seeking your personal information.
The FTC (Federal Trade Commission) is just as direct. It says "all investments come with the risk that you'll lose money," and that anyone who claims little or no risk is a scammer. It also flags a secret method or proven system for making money, few details about the investment, and someone who pressures you or discourages you from doing research.
A note so you don't overcorrect: some products really do carry a guarantee from the U.S. government. The FDIC (Federal Deposit Insurance Corporation) insures money in traditional deposit accounts, like checking, savings, and CDs, at FDIC-insured banks if the bank fails. The FDIC says deposits are automatically insured to at least $250,000 at each FDIC-insured bank. But the FDIC says it does not insure stocks, bonds, mutual funds, annuities, or crypto assets, even when a bank offers them. TreasuryDirect, the Treasury's site, says U.S. savings bonds are backed by the full faith and credit of the U.S. government, and that EE bonds sold today are guaranteed to double in value in 20 years.
Our rule of thumb: when someone selling an investment promises it can't lose, treat that as a red flag. Real government protections exist, but they are narrow, and you can check them yourself. The FDIC's BankFind tool shows whether a bank is FDIC-insured, and TreasuryDirect explains what savings bonds guarantee. A stranger's word that an investment is guaranteed doesn't count.
Do this now: Write down the five phrases "risk-free," "guaranteed returns," "too good to be true," "everyone is buying it," and "invest right now," and keep the list on your phone.
Fake platforms and the long con
Many scams now run through a fake website or app. Investor.gov's guide to relationship investment scams says scammers reach out online or by text and try to build trust through friendship or romance, often over weeks or months, before steering you toward phony investments. It says they may send a text pretending to be an old friend or claiming to have reached you by accident.
Then comes the platform. Investor.gov says scammers may send you to a legitimate looking but fake website or a popular mobile app, and that an app being on a well-known app store doesn't mean it or the activity in it is legitimate. They can make you believe you're doing well with fake screenshots or fake trading information. The FTC describes the same pattern for crypto: fake reports show your money growing, scammers urge you to invest more, and then they shut down the accounts and disappear.
When you try to withdraw, Investor.gov says, the scammer will have an excuse, ask for more money, or say you must pay fees or taxes first. It warns never to pay money to recover your investment or to release funds.
Do this now: If someone you met online starts talking about an investment, stop and make that decision on your own, away from their advice.
How they ask you to pay
Investor.gov's checklist lists being asked to pay for investments by credit card, gift card, or wiring money abroad or to a personal account as a red flag. Its relationship scam guide adds that scammers may tell you to wire cash or buy crypto assets at a bitcoin ATM or through a crypto platform, and that if you wire money outside the U.S. for an investment that turns out to be a scam, you will likely never see your money again.
Do this now: Before you send money for any investment, ask where it's going. If the answer is a gift card, a personal account, an overseas wire, or a crypto ATM, stop.
Check the person and the firm
Investor.gov says "unlicensed, unregistered persons commit much of the investment fraud in the United States," and tells you to always check the background of any financial professional. Its free search tool shows whether a person and their firm are licensed with the SEC, a state, or FINRA (the Financial Industry Regulatory Authority), and any disciplinary history. It may send you to BrokerCheck, FINRA's site for broker-dealers.
The FTC adds two more checks: search the company and its people with words like "review," "scam," "fraud," or "complaint," and call your state securities regulator about whether an offer is registered. NASAA (the North American Securities Administrators Association) lists contact information for state securities regulators. The FTC also suggests talking to someone you trust before you invest.
Do this now: Look up one person or firm you've heard about on Investor.gov today, even if you trust them.
If something feels wrong
Investor.gov says that if you think you're caught up in a relationship investment scam, stop communicating with the people involved right away and don't give them any more money. It also warns that afterward, a scammer may come back pretending to be a regulator or law firm that says it has recovered your funds and ask for an upfront payment.
The FTC says to report investment fraud to the FTC at ReportFraud.ftc.gov and to the SEC at sec.gov/tcr.
Do this now: If anyone offers to recover lost money for a fee, treat it as a second scam.
Teach it this week
Big idea: A promise that an investment can't lose is a warning label. Real government protections, like FDIC insurance on bank deposits, are narrow and can be checked on official sites, and real professionals can be looked up.
Background for the teacher or parent: The SEC's Investor.gov: red flags of investment fraud checklist is a one-page list.
Classroom version (10 minutes)
- Hook (2 min): Read a made-up post: "Guaranteed 20% a month, risk-free, spots closing tonight." Ask: how many red flags?
- Explain (3 min): Cover the red flag phrases, fake platforms, risky payment methods, and the difference between an insured savings account and a stranger's "guarantee."
- Activity (4 min): Students search Investor.gov for a clearly made-up name (it should say no match was found) and discuss why the site says that may mean the person isn't registered.
- Exit ticket (1 min): Write one phrase that would make you stop and check.
Kitchen Table Talk (10 minutes)
- Ask whether anyone has seen an investment ad or message lately.
- Read the five red flag phrases together.
- Check the ad or message against the list.
- Tonight's action: look up one financial professional the family knows on Investor.gov.
No real account details or personal information should be shared during this activity. Free to use; please keep the source credit.
Education only, not financial, legal or tax advice. Not a registered investment adviser.
Sources
Primary sources
- SEC Investor.gov: red flags of investment fraud checklist, date checked: Oct 22, 2026
- SEC Investor.gov: check out your investment professional, date checked: Oct 22, 2026
- SEC Investor.gov: relationship investment scams, date checked: Oct 22, 2026
- FTC: investment scams, date checked: Oct 22, 2026
Supporting links
- SEC Investor.gov: internet and social media fraud, date checked: Oct 22, 2026
- FDIC: deposit insurance, date checked: Oct 22, 2026
- TreasuryDirect: U.S. savings bonds, date checked: Oct 22, 2026
- NASAA: contact your regulator, date checked: Oct 22, 2026