With the advent of the internet there have been an abundance of investment scams, each one offering that glimmer of hope to increase a bank account or an offer to get-rich-quick. When you add the lure of cryptocurrency into the mix, the landscape is ripe for threat actors to look and sound “real” while stealing money from those that are just hoping to improve their lives. These bad actors will go to incredible lengths to look and sound legitimate, after all, they are raking in billions and can afford to invest in appearances. To protect yourself from falling prey to these thieves, you need to also be educated on them.
Types of Fraud Investment Scams
Ponzi scheme/Pyramid scheme: Named after Charles Ponzi who established the first more advanced scheme of this type, the main concept is taking money from initial investors then using the money from newer investors to pay the original ones. It doesn’t take long before the entire process collapses.
High pressure boiler room scams: These are typically high-pressure salespeople in call centres that tell lies about non-existent investments/securities or some that are overvalued to get the prospect to buy. The investments end up being dumped and the investors lose everything.
Pump and Dump Fraud schemes: Threat actors praise a stock or another asset to inflate the initial price (pump) and then they proceed to sell their personal shares to make a profit while reducing the price for those that invested (dump).
Paying a fraudulent Advance Fee: The fraud organisation charges an investor an upfront fee with the promises of profitable returns- that never come.
Cryptocurrency schemes: There are a ton of crypto currency scams; the most popular are pump and dump scams, fake ICOs (initial coin offerings), and exchanges that are fraudulent. Crypto currency investment should be taken with a lot of caution.
Affinity fraud: Those involved in these scams approach specific groups that they believe will be soft-touches for investments. These groups can include ethnic communities or religious and they exploit their trust or affiliations that may be shared to promote scam investment opportunities.
One well-publicised Affinity fraud in South Africa in 2023 was known as the ANT-RANCH fraud, promoted by Ant Ranch Breeding Program Individuals were approached to invest in a variety of American animal types and were promised to received continual profits/dividends on a daily basis. Investors were given a variety of bank accounts to make their deposits and communication was only done via WhatsApp messaging. After investing, they never heard from the organisation again. The South African Police Service (SAPS) Commercial Crime Investigation Unit has put the word out for all victims of this scam to come forward.
The rule of thumb in these cases is to never invest any of your hard-earned money with any organisation that doesn’t have specific credible credentials. If you are interested in investing, make use of a credible and legitimate investment firm. Fraud Investment Scams that appear legitimate so always be suspicious when any offer comes your way that “sounds too good to be true.”
“Our team has a continual and updated list of the many variations that threat actors use in their fraudulent investment scams. We make ourselves available to answer and address all questions and research to ensure that clients aren’t taken advantage of.”
Sharon Knowles, CEO DaVinci Cybersecurity
Source: dfpi.ca.gov/investment-scams-what-consumers-need-to-know/
linkedin.com/pulse/another-ponzi-scheme-fools-desperate-de26f/
algoafm.co.za/local/saps-call-on-investors-of-ant-ranch-scam-to-come-forward
Image Source: Canva
