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If you were offered the chance to triple an investment in two months, would you take it? It might be hard to say no, but it might really be too good to be true.
Since 2020, the Better Business Bureau (BBB) has received more than 4,000 reports from consumers about investment scams, many of which involved cryptocurrency or a new take on romance fraud.
Reports to BBB show that investment scams often take the form of long-term confidence scams, where fraudsters pursue romantic and platonic relationships to gain the trust of their targets. That has caused losses to rise, with the median report increasing from $1,000 in 2021 to almost $6,000 this year.
To help consumers and businesses understand investment scams, the Better Business Bureau’s International Investigations Initiative combed through thousands of reports to BBB Scam Tracker, talked with experts, and investigated the newest trends to compile the III’s newest study - Investment scams: Scams linked to crypto and romance rise, according to BBB study.
The study combines consumer stories and examines how scammers convince their targets to hand over thousands of dollars. It also shows how a rise in organized crime based in southeast Asia has helped perpetuate this global scam.
This in-depth study is intended to help consumers, businesses, news media, researchers and regulatory agencies understand:
- How investment scams work and how to avoid them
- What type of enforcement is helping curb the fraud
- Red flags for consumers and businesses
An increasingly common tactic is revealed by an experience of a man from California who told BBB he was traveling through France when he matched on a dating app with a woman calling herself “Mei”. The two talked for months and even made video calls as they got to know one another. Eventually, she brought up cryptocurrency investing as a hobby of hers and convinced Darryl to join her.
The two continued to chat on the phone for months, and he invested nearly $1,000. One day, when Darryl went to check the application he used for investing, it appeared to be down. When he contacted Mei, she rebuffed him and disappeared.
In some cases, losses grow into devastating amounts.
One woman in Connecticut reported to BBB about a cryptocurrency scam she encountered on social media. Unbeknownst to her, a friend's social media account was hacked.
The scammer, posing as the friend, said they ran an automated training bot – a program used to trade cryptocurrency automatically according to a user’s guidelines – with guaranteed returns. The account appeared to grow and grow, and eventually Jeanne wanted to withdraw some of it. The scammer, still posing as the friend, said they wanted a 20% commission, which Jeanne paid. Afterward, they disappeared, and Jeanne lost $84,000 in the process.
Red flags: How to avoid cryptocurrency investment scams
- Deals involving little-known cryptocurrencies
- Requests to share your cryptocurrency wallet with someone you don’t trust completely
- Strategies offering guaranteed returns
- An investment that takes little effort or time to pull off
- Someone offers their secret strategy or says not to research their claims
- Too-good-to-be-true claims
- A stranger suddenly wants to befriend you
Where to report investment scams
- Better Business Bureau or BBB Scam Tracker
- Federal Trade Commission (FTC) or call 877-FTC-Help
- Federal Bureau of Investigation (FBI) or call (202) 324-3000 for general reports
- FBI Investigation and reporting hub for scams listed at link
- Canadian Anti-Fraud Centre - or 1-888-495-8501
- Find your state's Attorney General online