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An investment scam is a fraudulent business or scheme that convinces investors to make financial decisions based on false information. Often, these scams promise high returns with little to no risk involved. Scammers usually succeed by appearing legitimate. They employ smooth talking salespeople, professional-looking websites, and endorsements from satisfied customers. Sometimes they will claim to have insider information or use complex jargon to appear knowledgeable and trustworthy. The types of investment scams are diverse. Examples include Ponzi schemes, pyramid schemes, and pump and dump scams. In a Ponzi scheme, returns to earlier investors are paid from the funds of new investors. Pyramid schemes involve recruiting others to invest in the scheme, with returns being dependent on new recruits. In pump and dump scams, a cheap stock is hyped up to drive up the price, then sold off by the scammer, causing the price to plummet and investors to lose their money. Remember, if a deal sounds too good to be true, it probably is. Always research before making investment decisions.