If you are searching the internet for a lucrative investment opportunity, it pays to be cautious. You will often see promises of excellent returns for even the smallest investment sums. But while these promises may seem tempting at first glance, they might just be a great way to lose money fast!
Ads and e-mails as lures
This type of fraud often runs through a series of phases. Phase 1 is used to lure victims in: the fraudster’s goal is to get you to register your personal data, particularly your telephone number, on a counterfeit website.
The scammers use advertising in well-known online magazines or social media to attract their victims. They like to name public figures or popular television shows in these ads as a means of promoting the ‘investment opportunity’. It goes without saying that the person or property is being used without permission. If you click on the link, you will generally be taken to a professionally designed, reputable looking website.
E-mails can also be used as bait. These e-mails make use of tricks that can fool common spam filters, such as shortening buzzwords like Bitcoin or adding special characters to them. They sound legitimate, with phrases such as “your Swiss financial partner”.
Initial contact over the phone
Once you have entered your data into the website, phase 2 begins. You will receive a call from an ‘advisor’ or ‘broker’. As you were the one who registered for the ‘service’, you have no reason to find this suspicious.
You will then receive advice on a variety of investment opportunities, like cryptocurrency, gold, or specialised financial instruments such as options and derivatives that allow you to bet on market developments for currencies or commodities. In the beginning, you are only asked to agree to smaller investment amounts, such as 250 or 500 euros.
If you do transfer the money, you will be assigned an ‘online banking login’ so you can access your supposed securities account (phase 3). This allows you to view the money you transferred, and every time you log in you can watch your so-called investment grow. In reality, of course, the money you sent is long gone.
The initial deception is just the beginning
Over time the ‘financial advisor’ will attempt to convince you to transfer even more money – usually several thousand euros – after all, it's obvious that the investment is worth it. Often, existing investments are even cancelled by the ‘consultant’ in order to increase the amount of capital available. You might not even notice that there is anything wrong until you attempt to have some of your ‘returns’ paid out.
But even then, the scam is not over: the scammers appear to be willing to pay out the money. However, to do that they of course require that you transfer even more money to them. The reasons for this extra payment are often given as taxes, bonuses, additional funding commitments or insurance payments. The criminals may even attempt to convince you to authorise a transaction in your online banking account, supposedly to allow the money to be paid into said account. In truth, of course, the money is paid into the scammer’s account instead.
Now is the moment that you might truly realise that this is a scam: you insist on receiving your money and get nothing. You realise you are a victim of fraud and the money you have spent is gone forever.
Of course, it is impossible to fully protect yourself from criminal intrigue, but in this case, there are a few things you can do to help:
1. Never click on sensational sounding advertisements
Pay attention to what on the internet is an advertisement and what is a genuine link. Ads can sometimes look identical to articles in serious online magazines. Be sure to never click on these dubious ads. If the ad contains promises such as “small investment, large returns”, it is most likely a scam.
2. Protect your personal information
Never provide personal information to strangers. This includes never giving third parties any authorization to log into your computer or smartphone, even if they say they simply want to help you access a website. Doing so could allow the scammers to access sensitive data. Remain suspicious even if this offer is sold as a generous attempt to help you.
3. Pay attention to keywords, layout and spelling
Be wary of keywords designed to engender trust, such as “your Swiss financial partner” or “top story”. Never open these emails. If you receive an e-mail purporting to be from a well-known TV series, look at the spelling to see if it is correct, or if it is spelt slightly differently or, as an example, if individual letters have been replaced by numbers.
Pay close attention to websites that claim to be for investing money: can you share the link with friends? If you can't, then it is most likely a fraudulent website. This is because sharing the link reveals the exact address of the website.
4. Research the company
Doing some research can help you to discover whether or not the company in question is legitimate. In particular, you should check that the business is registered and licensed and find out where it is located.
It’s best to use a variety of sources to research data on the business and the investment product. In addition to supervisory authorities – in Germany the Federal Financial Supervisory Authority (BaFin) – consumer protection organisations or expert law firms can also provide reliable information. In addition, you could search for independent reviews from other investors. It’s also a good idea to speak to your family or friends to get a second or third opinion.
In principle, you should not decide to invest in a product until you have a good understanding of what it is and the risks involved.
