Financial and investment scams involve fraudulent schemes promising high returns with little or no risk. Sometimes, these scams initiate as a causal encounter online (similar to a romance scam), or through an indirect introduction. They might involve downloading fake “trading apps” that seem legitimate but, instead, they transfer your “investment” money directly to the scammer.
Subsets of financial and investment scams are crypto scams and pig butchering scams, which follow slightly different patterns.
How it typically happens
- The scammer initiates contact via social media, ads, or messaging apps
- The victim is introduced to an “investment platform”
- The victim is encouraged to deposit small amounts first
- Fake profits are shown in the app or platform to build confidence, but rarely they can be withdrawn
- The scammer will pressure the victim to invest larger amounts to reach a tangible goal for the victim
The red flags
- The promise of guaranteed returns or “risk-free” investments
- Unregulated platforms
- Pressure to act quickly
- Withdrawal issues or fees
What you can do
- Stop sending funds immediately
- Don’t trust the balances shown in apps and platforms
- Document all transactions
- Report the scam to financial institutions
Useful articles on online scams
- What is an online scam?
- Types of online scams
- Scam victimology: why did they pick me?
- How scammers choose their targets
- Why so many scams go unreported
- Scam cases that made the news
- AI and the next wave of scams
Useful articles on financial and investment scams
- The trading trap of the Instagram FOREX scams
- Social media crimes: Anna Sorokin
- The Twitter Bitcoin Scam
- A safe guide to start investing in crypto
