Bojan Ilic – Chairman & Global Director at Swiss Security Solutions, expert in Security & Investigations.
Financial fraud and scams are everywhere these days, and no one’s really safe, whether you’re new to investing or have years of experience. The numbers are pretty shocking: In the U.S. in 2024, “Investment scams were the top cause of loss, raking in more than $6.5 billion, the FBI said. Compromised business emails and tech support scams led to over $2.7 billion and more than $1.4 billion in losses.”
Many scammers are getting smarter, too. From phishing emails and Ponzi schemes to fake advisors and shady online platforms, the tricks they use keep changing. For anyone investing money right now, it’s more important than ever to stay sharp and make well-informed decisions.
The digital revolution has dramatically accelerated global connectivity, resulting in unprecedented access to information and interaction among people across the world. Digital scams have emerged as a pervasive threat in this new landscape. While estimates of the true global scale of digital scams vary, most point to a crisis of significant proportions.
Here are 10 solid strategies from my experience to help investors keep their money and wealth safe and steer clear of financial fraud.
1. Check whether an investment platform is legitimate.
Always verify that any investment platform you’re considering is legitimate. Not all platforms are equally secure or properly regulated. Before you commit any funds, it’s important to research the brokerage, online platform or financial service provider thoroughly.
Look for key signs of reliability: The platform should have strong security features like two-factor authentication (2FA), encryption and up-to-date security certifications. Make sure the provider complies with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. It’s also wise to check their track record, licenses and reviews.
2. Beware of phishing attacks and impersonation scams.
Phishing and impersonation scams are among the most common fraud tactics globally. Scammers pose as trusted institutions and companies, using fake websites and emails that mimic real ones.
Always check URLs, email domains and phone numbers carefully. Avoid unsolicited links; go directly to official sites. Phishing often preys on fear and urgency, so be cautious with messages pushing immediate action and verify before responding.
3. Avoid Ponzi and pyramid schemes.
Ponzi schemes promise high returns with little risk, relying on new investors. They often fall apart when recruitment slows. Watch for guaranteed high returns, vague business models, no audits or pressure to recruit.
4. Don’t fall for social media and romance scams.
Social media and dating apps are a key target for scammers. Romance fraud is rising, authorities warn. Scammers build trust and exploit victims financially, often mixing in fake investments.
Be cautious of unsolicited investment offers via social media and dating apps; verify everything. Never send money or share personal financial details with online-only contacts. Report suspicious profiles to platforms and authorities to prevent further fraud.
5. Conduct thorough research on investments.
Smart investing starts with strong research. Due diligence is essential, not optional. Go beyond brochures and promises to uncover the real foundation of any investment opportunity. Verify regulatory status using official national sites. Understand how the business generates returns and whether risks are fully disclosed. Scrutinize leadership, check track records and credentials of executives and advisors. Review performance data for consistency, volatility and transparency.
Red flags include vague disclosures, unregistered advisors and aggressive sales tactics. Stay sharp, as ignoring these signs could lead to major losses.
6. Recognize and avoid fake tech support and recovery scams.
With fake tech support and recovery scams, scammers pose as financial reps, warning of “account breaches” to steal data or fees.
Always contact support through verified channels from official websites only. Never share passwords or allow remote access unless you initiated the request. Be skeptical of asset recovery services demanding high upfront payment to recover lost funds. These scams often exploit rising fears of cybersecurity breaches.
7. Strengthen your digital security practices.
Strengthen your digital security practices to help block many common fraud attempts. I’ve found good digital hygiene is one of the strongest defenses against scams and cyber threats.
Use complex, unique passwords for every platform to keep your accounts secure. Rely on a trusted password manager to store and manage your login credentials safely. Enable multi-factor authentication (MFA) wherever it’s available for extra protection. Regularly update your devices and apps to close any security gaps or vulnerabilities. Consistent digital security habits can reduce your risk of falling victim to online fraud.
8. Beware of CEO fraud and sextortion.
CEO fraud and sextortion scams are rising, using manipulation to pressure victims. CEO fraud involves scammers posing as executives to demand urgent wire transfers. Red flags include secrecy requests, urgent payment demands and odd email domains. Always verify payment requests verbally and require dual approval for big transfers.
Sextortion scams threaten to release compromising content unless a ransom is paid. I suggest to never respond to threats; report immediately to law enforcement and secure your data. Both scams can cause serious harm; awareness is key to prevention.
9. Stay informed about emerging threats.
This not only boosts your chances of recovering losses but also aids law enforcement and criminal authorities in tracking and dismantling fraudsters and fraud networks.
10. Report suspicious activity promptly.
Prompt reporting can increase your chances of recovering losses and assists law enforcement, regulatory bodies and international agencies in exposing and dismantling fraud networks. You may want to consider the option of engaging reputable private detective agencies, particularly if official authorities lack resources or are unable to pursue your fraud case.
As financial fraudsters grow more sophisticated, investors must strengthen their defenses. By applying these 10 strategies, investors can reduce their risk of falling victim to scams and better protect their financial futures. Vigilance, ongoing education and proactive security measures remain our best tools in the fight against fraud.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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