Why checking for news and reviews can save you from investment scams
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If potential victims have done their usual checks, they would probably have stumbled onto the police advisory that expose such dubious deals.
PHOTO: ST FILE
Many of us scour the web to check user reviews before we pick our next TV series, the right gadget to buy or the restaurant to eat at, yet when it comes to investments, we often shoot first and ask questions later.
It’s not hard to see why – greed and the fear of losing out often cloud the mind and make victims jump headlong into a deal without doing the most basic checks.
For instance, scammers like to create fake news by misusing the names of celebrities, political leaders and logos of news media to trumpet fictitious endorsement of investment products.
If potential victims had done basic checks, they would probably have stumbled onto the police advisory and probably several genuine online news reports exposing such dubious deals.
Yet many people, here and abroad, continue to fall for investment scams because they fail to make the checks that could save them from huge losses.
Some gullible investors in Singapore lost more than $30 million in just over a month earlier this year after being duped by fake deals.
If people continue to think that it is easy to strike it rich without checking whether a deal is genuine, more money will likely go down the drain because scammers have started to use AI-generated deepfake technology.
So instead of just supplying a name and picture, scammers roll out videos depicting celebrities being interviewed about the incredible investments they have made.
These videos are circulated on social media or via messaging apps, where scammers join the chats and boast about their huge gains, hoping that unsuspecting readers will fall for such ploys.
Fake friends to lure more victims
Investment scams are most lethal when they are promoted directly to victims by newfound “friends” they meet on social media or dating apps.
Such friends can spend weeks or even months building trust in the relationship before they move in for the kill by promoting an online investment platform.
They invariably claim they have made money by investing through the platform and they are sharing this tip only because of their “close friendship” with you.
Once judgment is clouded by such a recommendation, even experienced investors can be conned because such online sites are built to mimic genuine trading platforms.
So victims see live feeds of stock indexes and currency rates and the “authentic” look and feel of the site draw them to register as new investors.
Once they put in funds, they can start trading. But these trades are not real as the whole site is wired to work like an online game that favours the investors, who see big wins that tempt them to put in even more money.
A victim told Invest that this was how he lost $800,000 to a foreign exchange scam a “friend” encouraged him to invest in. He started with just $20,000 but ended up putting in more and more money when he made huge profits.
At the height of his game, he had $8 million in his account but his jubilation turned into a nightmare when he could not withdraw the money. When he finally checked on the outfit, he discovered that it did not exist in the real world.
In addition to checks that can expose many scam investments, there are two common tell-tale signs that should put you on the alert.
Unusual payment methods. Scammers tend to avoid bank transfers, which can lead the cops to them. So be wary if you are asked to use cryptocurrency, payment apps or online gift cards.
Secrecy. If you have stumbled onto a gold mine, you would most likely tell your relatives and close friends. Yet, scammers will also always tell you to keep such hot tips to yourself.
The bottom line: Don’t be so trusting, and always check carefully before you part with your money.
Tan Ooi Boon is the Invest Editor of The Stra its Times
