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An investment scam is a fraudulent practice that involves offering potential investors an opportunity to make unusually high returns on their investment. These scams often entice investors with promises of quick, high returns. They are designed to look like legitimate investment opportunities. The scammers usually start by creating a sense of urgency. They tell you that you must invest quickly or miss out. They might also try to convince you that the opportunity is exclusive, available only to a select few. Investment scams can happen in many forms, like Ponzi schemes, pyramid schemes and pump and dump scams. In Ponzi and pyramid schemes, money from new investors is used to pay the returns for the older investors. In pump and dump scams, scammers inflate the price of a stock they own, then sell it when the price is high. Always be cautious when investing. Research the investment opportunity thoroughly and seek advice from a financial advisor. If it sounds too good to be true, it probably is.