Social media can be a fun and entertaining place when there is nothing else to do, scrolling endlessly at the interesting content people post. However, it could also be a place of bad intentions as scammers try everything to get their hands on your money. They come up with fake investment opportunities and advertise them on their Facebook pages. These scams dupe victims out of thousands of dollars on a daily basis, fooling more people than you think. This is why it is important to know what investment scams are, the types of investment scams, and how to avoid these types of scams.
What Are Investment Scams?
Scammers pretend to have an investment opportunity for their victims and convince their victims to join. The victims think that the scammers are convincing and join their investment opportunity, which costs money in advance to join. They wire the money to the scammers, thinking that they will get more money back, but then the scammers block them once they get the money.
These scams can happen on social media networks, instant messages, robocalls, or through phishing emails. A scammer pretends to be someone else and tricks their victims into believing they are that person. There are many different types of fake investment opportunities that scammers come up with to steal your hard-earned money.
Types of Investment Scams
Advanced Fee Fraud
Scammers tell the victims that they will receive so much money after this investment. All they need to do is pay a fee up-front in order to receive this large sum of money. Once the victims transfer their money to the scammers, they take all their money and block them.
They usually target investors who have lost money in a risky investment, promising them to help them get their money back. However, this is all a trick so that the investors can lose even more money.
Scammers target members of a group, such as the elderly, a religious organization, or a variety of ethnic groups. These scammers pretend to be members of this certain group, claiming that there’s an investment opportunity that everyone should take part in.
Since everyone trusts one another in the group, they partake in this investment not knowing it’s a scam. The scammers convince other members to promote this investment, claiming it will be worth their while. These members advertise it, then feel bad when they realize it was all a scam.
Scammers advertise this fake investment opportunity through social media platforms, phone calls, instant messages, and emails. They claim that if you give them a small amount of money, they will promise you a larger sum of money in return. The victim gives the scammer money, thinking they will get a larger sum of money. However, the victim doesn’t know that the scammers actually rely on other people to join the investment opportunity to give the older members their money back.
For example, if a victim joins, they usually have to wait a while until someone else joins to get their money back. They receive the new member’s money without anyone realizing it, other than the scammer. Once people stop joining the investment opportunity, the whole scam falls apart and everyone loses money, except for the scammer.
Cash Flipping Scam
You receive a message, claiming that you can earn two, three… even ten times more money than you are earning now within minutes. All you need to do is send the scammer the requested amount of money via Cash App, Venmo, your bank account, or another money transfer app and they will supposedly flip your money within minutes. There have even been scammers that have asked for your bank account information so they can take the money out themselves.
However, all these scammers are going to do is steal the amount of cash that you send them. Once they get their hands on your money, they block you instantly and never talk to you again. These scammers often have bad grammar, with missing words and misspellings. They also steal photos from other people and pretend to be them. Once you send them the money, they take it and block you off of whatever social media platform they were using to message you.
Investment Scams Warning Signs
- They are pressuring you to invest in something right away.
- They promise that you will make more money through the investment they are advertising.
- They claim that the investment opportunity has very minimal risks.
- They won’t answer your questions or allow you to ask questions.
- They avoid giving you detailed answers and don’t give you full details about the investment.
- They claim that the investment doesn’t have to be registered to the state, even though it does.
- They promise you top secret information if you sign up for their investment.
- They are unprofessional and don’t communicate back with you in a timely manner.
How to Report Investment Scams
If you suspect that you’ve been a victim of investment scams, the best way to get help is to report it to the FTC. They will be able to tell you the next steps on how to protect yourself and help law enforcement with these cases. You can also report it to IdentityTheft.gov if your personal information has been misused in a scam. Finally, you can report any security fraud to the SEC Online. The SEC Online provides you with tips on how to invest without being scammed on their other website for investors, investor.gov.
How to Avoid Investment Scams
- Don’t send your personal or financial information to anyone you don’t know or that seems suspicious.
- Don’t believe in any investment opportunity being advertised on social media, through a message, or through a phone call
- Don’t use mobile payment apps, wire transfers, or gift cards to invest in anything.
- Watch out for anyone that adds you or messages you randomly on social media profiles.
- Report any scam that you have been a part of to the FTC.
Social Catfish is Here to Help You!
At Social Catfish, we want to help you verify the identities of those who might seem suspicious to you and find those lost connections that you are looking for. If you have their name, email address, phone number, social media username, or image, you can reverse search and see who the suspected person was that you’ve been in contact with if you are a victim of investment scams.