{"id":72302,"date":"2023-09-21T11:29:31","date_gmt":"2023-09-21T15:29:31","guid":{"rendered":"https:\/\/blog.myewm.com\/?p=72302"},"modified":"2023-09-21T11:29:31","modified_gmt":"2023-09-21T15:29:31","slug":"investment-scams-are-everywhere-how-to-spot-one","status":"publish","type":"post","link":"https:\/\/blog.myewm.com\/?p=72302","title":{"rendered":"Investment Scams Are Everywhere \u2013 How to Spot One"},"content":{"rendered":"
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FTC: Financial scams, including cryptocurrency schemes, cost consumers $3.8B last year just in the U.S. \u2013 twice as much as in 2021.<\/div>\n<\/div>\n
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NEW YORK (AP) \u2013 Social media is full of scammers promising guaranteed returns on investment, and consumers lost billions of dollars to them last year.<\/p>\n

Troy Gochenour, 50, of Columbus, Ohio, was conned out of $25,800, including $15,800 in borrowed money, in a crypto-mining scam that began with a WhatsApp message from a beautiful stranger.<\/p>\n

\u201cI had just moved home to restart my life, after trying to make it in show business in New York, and I was lonely,\u201d Gochenour said. \u201cSo I started online dating. Then I got a WhatsApp message that began, \u2018Sorry to bother you.\u2019\u201d<\/p>\n

Financial scams, including cryptocurrency schemes, cost consumers $3.8 billion last year just in the U.S., according to the Federal Trade Commission (FTC), twice as much as in 2021. Such scams are also a problem globally.<\/p>\n

Those who work in the space, including the FTC and Better Business Bureau, say the speed and convenience of the internet, the rise of online payment platforms and apps, and the spread of financial misinformation have all contributed to the increase. They also cite pandemic-era isolation and loneliness.<\/p>\n

In Gochenour\u2019s case, he spent several weeks messaging with someone who seemed romantically interested in him before she brought up \u201cliquidity mining.\u201d<\/p>\n

Though he\u2019d been a crypto skeptic, he eventually began following her advice and instructions. Scammers like Gochenour\u2019s have become skilled at setting up sites that convincingly look like legitimate cryptocurrency companies, and Gochenour was taken in. After he set up a crypto wallet, it appeared that the money he transferred there was growing just the way his scammer said it would.<\/p>\n

\u201cI was hooked on this person,\u201d he said. \u201cAnd at first it looked like it was working. She said, \u2018We could be together, you and I, and make all this money.\u2019\u201d<\/p>\n

Then one day, when he had transferred about $5,000 of his own money to the wallet, he woke up to check the balance and the money was gone. When he looked at a website his scammer had directed him to, to try to understand what had happened, he saw a \u201ccontract.\u201d He contacted the scammer about it, and she told him to contact \u201ccustomer service,\u201d who told him to put in another $10,000 in order to get all of his money back, plus bonuses.<\/p>\n

Gochenour continued to add money to his wallet when prompted, despite the money being transferred out each time, until it looked like he had $200,000 coming to him.<\/p>\n

\u201cThe numbers were all fake, all manipulated,\u201d he said.<\/p>\n

When he was told he\u2019d have to pay $35,000 in taxes up front to access the $200,000, Gochenour realized it was a scam. By that point, he had taken out nearly $16,000 in personal loans on top of his $55,000 in student debt, each time lured by promises of even greater rewards. He now works with the Global Anti-Scam Organization to investigate similar frauds and to help educate others.<\/p>\n

To avoid being taken for a ride, consider the following:<\/p>\n

What are some common signs of an investment scam?<\/h3>\n

Most will sound quick, easy, and low- or no-risk. Many involve real estate, cryptocurrency, financial coaching, or gold. Typically, the company uses words like \u201cproven\u201d and \u201cguaranteed,\u201d along with testimonials from people saying they\u2019re on the other side and have benefited wildly. These are most often paid actors and invented reviews, according to Melanie McGovern, director of public relations for the International Association of Better Business Bureaus.<\/p>\n

\u201cWatch out for those endorsements,\u201d McGovern said. \u201cAnd know your friends. If you get a message that seems sketchy from someone\u2019s account, especially someone you haven\u2019t heard from in a while, reach out to them on a different platform. Because someone may be spoofing them.\u201d (Spoofing is a term for when a hacker disguises themselves as a trusted source.)<\/p>\n

Offers also tend to come with time pressure: \u201cMake big money fast!\u201d \u201cOnce-in-a-lifetime offer, gone tomorrow!\u201d Or elaborate steps that require infusions of more money at each stage, such as the liquidity mining con that Gochenour experienced. The scammer typically paints a picture of what life will be like when you\u2019re rich. But no one can guarantee a return, and anyone who promises a no-risk investment is a fraud.<\/p>\n

What should you do if you suspect an investment scam?<\/h3>\n

First, take time to research the offer. Scammers want to rush you, so slow down. Search online for the name of the company and words like \u201creview,\u201d \u201cscam,\u201d or \u201ccomplaint.\u201d<\/p>\n

Second, run the information by a friend or adviser. You may not have gotten an offer like this, but chances are you know someone who has, especially as scams often target specific communities, according to the FTC.<\/p>\n

Third, don\u2019t accept any unsolicited offers. If you get an out-of-the-blue, call, text, or e-mail about \u201can amazing investment opportunity,\u201d it\u2019s a scam.<\/p>\n

Finally, reject the high-pressure pitch.<\/p>\n

\u201cLegitimate companies let you take the time you need to investigate before spending any money,\u201d says McGovern.<\/p>\n

Scammers will also exaggerate the significance of current events, following headlines and tying their pitch to the news. By making an opportunity seem exciting, innovative, and timely, they hope a target will commit without having fully researched the offer.<\/p>\n

\u201cDelete, hang up, and walk away,\u201d the FTC advises. \u201cEspecially if they want you to take money out of your 401(k) to invest.\u201d<\/p>\n

What about crypto investment scams?<\/h3>\n

One tell-tale sign of a crypto con is when the scammer asks you to send money in advance for any reason, the FTC warns. The fraudster will often claim this advance payment is to buy something needed for a big return or to protect the money you\u2019ve already invested somehow. Gochenour experienced several versions of this send-money-to-get-more-money approach.<\/p>\n

\u201cNever mix online dating and investment advice,\u201d the agency cautions. \u201cIf you meet someone on a dating site or app, and they want to show you how to invest in crypto, or they ask you to send them crypto, that\u2019s a scam.\u201d<\/p>\n

McGovern said that the real scale of losses is greater than reported because many people are embarrassed to have fallen for these schemes and want to hide the outcomes from family and friends. But she encourages people to report the scams to the BBB, the CFPB, the FTC, and the Internet Crime Complaint Center.<\/p>\n

What are some other common investment frauds?<\/h3>\n
    \n
  • Investment coaching<\/strong>: In this scam, the fraudster will tell you their \u201cpatented,\u201d \u201ctested,\u201d or \u201cproven\u201d strategy will let you make money investing in stocks, bonds, foreign currency, or tax liens. They promise the approach will set you up for life and let you stop working. But after the free events and introductory videos, you\u2019ll have to pay fees up front for the rest of the expensive coaching, with no guarantee of return.
    \n\u201cIt\u2019s all part of a marketing scheme to get you to pay thousands of dollars for what turns out to be empty promises,\u201d the FTC warns in its consumer alert.<\/li>\n
  • Real estate coaching<\/strong>: In-person and online seminars about how to invest in real estate often promote \u201crisk-free\u201d training, luring targets with promises of financial freedom. If the promotional materials and sales pitches make over-the-top claims, be wary. Watch for phrases like \u201csure thing,\u201d \u201csecurity for years to come,\u201d or the chance to \u201crake in money by working part-time or at-home.\u201d Most people never make back the thousands of dollars of up-front fees.<\/li>\n
  • Precious metals and coins<\/strong>: If \u201cmetal dealers\u201d or \u201crare coins merchants\u201d tell you there\u2019s no better time than now to invest, watch out. Scammers in this con typically simply keep your money. The FTC advises consumers to read the Commodity Futures Trading Commission\u2019s precious metals fraud alert before investing in bullion, bullion coins, collectible coins, or gold.<\/li>\n<\/ul>\n

    Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.<\/p>\n

    By Cora Lewis<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    FTC: Financial scams, including cryptocurrency schemes, cost consumers $3.8B last year just in the U.S. \u2013 twice as much as in 2021. NEW YORK (AP) \u2013 Social media is full of scammers promising guaranteed returns on investment, and consumers lost billions of dollars to them last year. Troy Gochenour, 50, of Columbus, Ohio, was conned […]<\/p>\n","protected":false},"author":1401,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_expiration-date-status":"","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[9,61],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/72302"}],"collection":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/users\/1401"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=72302"}],"version-history":[{"count":1,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/72302\/revisions"}],"predecessor-version":[{"id":72303,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/72302\/revisions\/72303"}],"wp:attachment":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=72302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=72302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=72302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}