It's a sad fact that many people who are ripped off are conned by someone they know and trust – it is what's known as affinity fraud.
Here are some tips from the Commission for Financial Capability.
1. Never invest solely on the advice of a friend. They might have been fooled themselves into thinking it's a good deal.
Often the scammers target a group, like a church or sports team, and play on the affinity we have for our friends. They join the group and offer you what they say is a great investment.
2. Get the offer in writing. You should be suspicious if people aren't willing to put the offer in writing.
Often the fraudster will encourage you not to tell anyone else, because supposedly it's such a hot investment opportunity.
3. Get some advice – for example, from an independent financial adviser.
4. Don't be pressured or rushed into signing anything. This applies to investing and everything else – if you're feeling rushed, or you have even a small doubt, stop.
5. Avoid anything that claims there's no risk involved, and be careful about anything that offers really high returns.
If it seems too good to be true, it probably is.