How to Spot an Investment Scam
Investment scams are by far the most common types of scams. Here at Phoenix Solicitors, we see many of these scams day in and day out. We believe these scams are the most common due to the recent revelations of cryptocurrency and forex trading, paired with the banks offering extremely low interest rates for savings accounts. This leads to people looking online for different types of investment opportunities which will generate the most interest and profits.
We have also seen a surge in investment scams since the COVID-19 pandemic when people had more time to browse online. Most working people fell into financial difficulty leading them to look for additional sources of income.
Investment scams, like all other scams, can have a devastating impact on the victim – not only financially, but also mentally, causing problems at home, breakdowns in relationships, mental health issues and anxiety, and stress surrounding online banking.
We hope this information can educate people on how sophisticated these scams are and hopefully give you the knowledge to spot an investment scam and, in turn, keep yourself and your money safe.
If you have lost over £3,000.00 to an online scam, we may be able to help you recover your lost funds. Call us now to discuss your case in detail.
Typical Investment Scams
A typical investment scam will often start with an online advertisement that catches the investor’s eye. The investor will then likely submit an enquiry to the scam company online and shortly after, receive a phone call from the scammers.
Most victims of these scams have never invested before. Cryptocurrency, forex, stocks and shares etc. are often daunting and seem as risky to anyone who does not have experience in this field. Scammers are well aware of this and will often offer the investor to be paired with a professional trader/accounts manager who will carry out the trades on their behalf to minimise the risk to the investor as a first-time trader.
Account Set-Up
The scammer will then set up an account for the investor on the scam platform often giving them a platform where they can watch live trades, see their account balance fluctuate and create the impression that withdrawals can be made at their discretion from this account. This creates a false sense of security in that the investor’s money is in safe hands and they still have control over these funds when they decide to stop investing.
The scammer will likely ask for a small initial payment of £250.00 for the investor to test the waters which, over the next few days and weeks of making the payment, will generate profit leading to the investor wanting to invest further with the company.
After some time of investing, investors will see scammers manipulate the platform to show a great deal of profit is added to their account balances and will consistently apply pressure for them to continue sending more and more money over.
Conclusion of the Scam
These scams generally conclude in 1 of 2 ways. The first is that the investor decides they want to withdraw their funds and the scammers then disappear without a trace and stop responding, leaving their money and ‘profits’ locked in the account, or the scammers will begin asking for upfront fees to release the money such as upfront capital gains tax payments.
The second way is that the scammers may imitate a market crash and investors will see their account balances deplete to nothing. The scammers will then pressure the investor to invest more and more in order to recover their lost money. At this point, most investors become sceptical and refuse, and again are left with no way of recovering their money.
Free claim evaluationHow to Keep Yourself Safe and What to Look Out For When Investing
The typical hallmarks of an investment scam are as set out below;
- Small initial payment e.g. £250.00,
- Being assigned a professional accounts manager/trader to guide you through the process,
- Being asked to download Anydesk (remote software to allow scammers to control your device),
- Unrealistic returns or profits,
- Being set up with an account where you are unable to withdraw your funds freely.
If you are investing and come across the above, there is a chance you are falling victim to a scam.
We would always recommend conducting in depth research into any company before investing any of your money, for example checking Companies House, Trustpilot reviews, and seeking further advice from your bank.
What to Do If You Have Been Scammed
If you have lost over £3,000.00 to an online scam, Phoenix Legal Solicitors may be able to help you recover your lost funds. Don’t waste any time – contact us today and we will conduct a free evaluation of your claim.
0151 306 3694