Within the first two months of 2024, Texas residents reported nearly $500,000 in investment fraud losses to BBB Scam Tracker. Many of the reports detail new promotional tactics that scammers are using to encourage investors to participate in the scheme. Some Texans lost more than $100,000 and were unable to get their money back after rigging investment opportunities with “New Year” discounts on service fees, withdrawal fees, and tax fees. BBB's 2023 Scam Tracker Risk Report found that investment scams and cryptocurrency scams were the most dangerous scams North American consumers encountered last year. 80% of those targeted by this scam lost money, with the median loss being $3,800.
Investment fraud is not a modern invention, but many new technologies are making it easier than ever for anyone to enter the investment scene, opening up countless opportunities for legitimate and fraudulent traders. Masu. Scammers leverage the reach and engagement of social media to create highly engaging content and use confusing financial terms and unclear processes to establish themselves as expert sources of information. Masu. The main sources of information that scammers use to find potential targets include:
- Explore social media community groups focused on investing and cryptocurrencies and proactively reach out to people with questions.
- Create short-form video content that demonstrates your investment success by showcasing your large amounts of cash and lavish lifestyles.
- Establish romantic relationships with targets and then lure them into investment opportunities while relying heavily on flattery and hiding their true intentions behind the veil of online relationships.
Scammers use sophisticated systems designed to look like legitimate investment dashboards to mislead their targets into believing their initial investments are generating huge returns. Emboldened by what they see, investors listen to the scammers' exhortations and put their money into fraudulent funds that liquidate many financial assets, take out personal loans, and refinance homes. Invest more. The assumption is that once the funds are withdrawn, they will be easily recovered. Unfortunately, many victims find out that the “trader” is a scammer when they try to withdraw their money.
After attempting a withdrawal, investors may be charged a series of service fees, withdrawal fees, or taxes before funds are deposited into their account. These fee rates do not reflect any promotional benefits you may have used when you originally signed up for the Service. Once the fee is paid, the scammers disappear with their remaining investments, access to their dashboards is disabled, and many deactivate the social media accounts they used to initiate the contact. Alternatively, the scammers perform these actions immediately after the withdrawal request is made, without charging any additional fees. In some of the most expensive cases, scammers charge progressively higher fees for withdrawals, require total deposits into the fund to reach a predetermined level before access, or require additional services. There are things that claim you have to pay.
Consumer Reports:
Houston, Texas – January 2024
“[The trader] I was told I could start investing with $200 and earn up to $2,000.He will help me set up my account and manage my transactions [with] A 10% company fee will be charged from my profits. I was asked to transfer $200 to my Cash App account, and when the transaction was supposed to have finished, I was charged $575 for the profit. When I paid it, I was told I needed to pay $350 in IRS taxes. At that point I told the other party that I would not pay any more money and would report the incident. They deleted our conversation and blocked me. ”
Cedar Park, Texas – February 2024
“They have set up a group on WhatsApp that teaches people how to trade cryptocurrencies, and by setting up an account and downloading a specific app, they can earn money from cryptocurrencies using paired crypto contracts. I see the money in my account growing, but when I try to request the funds, it says I have to pay 33% tax to receive the funds. I reluctantly paid it. , still didn't receive the funds. In the end I was told there was an error and I needed to pay $500 to get it fixed. I said this was a scam and was immediately removed from the group. Ta.”
Fort Worth, Texas – January 2024
“Initially, we were approached by TikTok and they claimed that they were guaranteed 15% investment growth. After the initial investment. [of $3,000], When it came time to withdraw the funds, I was blackmailed. They said I had to pay more to “unlock” them to transfer my funds. I did this in hopes of not getting scammed. I was wrong. They kept all the money I sent and kicked me out if I asked too many questions. ”
To help Texas residents avoid investment scams, the Better Business Bureau recommends investors follow these guidelines:
Don't be fooled by high-handed or intimidating tactics. If a “trader” contacts you, he or she may try to convince you that you will only receive high returns if you invest in the fund right away. Be wary of people who use this type of language unless you have a working relationship and are confident that the words are legitimate. If you have already provided the initial investment, you may be threatened with legal action if you do not pay the additional fee. Recognize these signs as signs of a scam and avoid interacting with anyone who relies on high-handed or threatening tactics.
Be skeptical of return guarantees. No legitimate trader can predict the future, and unexpected fluctuations in the market can minimize returns on even the most stable funds. Investing comes with inherent risks, and scammers often try to encourage people to participate by guaranteeing a certain percentage or value back on their investment. These get-rich-quick tactics may sound too good to be true, but they're another example of why they probably are.
Please research. Especially if you're approached unsolicited by someone via social media, take the time to look up their name, business, or group online and see if anyone has had issues with them before. Please Confirm. Check consumer reports on BBB Scam Tracker to see if the company is listed or certified by the organization. BBB certified companies must adhere to the organization's trust standards to maintain their status, and one of the key elements of these standards is responsiveness.
Familiarize yourself with the investment terms and process. Consumers considering entering the investment scene are encouraged to familiarize themselves with standard processes, terminology, and systems to gain the knowledge necessary to recognize unusual interactions. You don't need to be a financial expert, but the ability to talk about financial terms in a conversational manner can help investors identify scammers and find the right person for their needs.
If you've been the target of an investment scam, report your experience to the Better Business Bureau at BBB.org/ScamTracker. The information provided will help prevent others from falling into these costly schemes.
