Investment scams are on the rise, and they can strike anyone, anywhere. Learn how to protect yourself and hear a real-life story of how Bank Midwest helped one customer recover.
Understanding Investment Scams: What You Need to Know
Investment scams are deceptive schemes that trick individuals into investing money with promises of high returns. Instead of making legitimate investments, scammers take the money for themselves, leaving the victim with a significant financial loss. These scams can wipe out your life savings in the blink of an eye, making it crucial to recognize and avoid them.
Common tactics used by scammers include guarantees of high returns with little to no risk, high pressure to invest quickly, and unsolicited offers. These red flags are essential to recognize to protect your hard-earned money.
A Real-Life Story: Mrs. C’s Ordeal with an Investment Scam
Mrs. C, a Bank Midwest customer, was contacted by someone on Facebook Messenger claiming to be a well-known figure. After building her trust over several weeks, the scammer convinced her to switch to a more secure messaging app, Telegram, to discuss a ‘fool-proof’ investment opportunity.
Mrs. C was instructed to open a Bitcoin account and make several deposits, totaling $14,000. Initially, her investment account showed a profit of $500,000. However, to withdraw her profits, she was told that she needed to deposit $4,000 to cover fees. She didn’t have the cash on hand to pay fees, so the scammer offered to deposit a check for $10,000 to her personal bank account. She then transferred the funds to her Bitcoin account. Every day this account accrued fees, so the scammer sent another check for her personal bank account to cover them.
When she tried transferring additional money to cover the latest fees, she discovered her personal bank account had been frozen. This discovery was made while Mrs. C was traveling on vacation – out of state.
How Bank Midwest Stepped In to Help
Bank Midwest’s Fraud Prevention Department was able to contact her and explain that the checks from the scammer were returned as counterfeit, causing her account to be overdrawn. Horrified, Mrs. C expressed her distress and the difficulty of her situation.
The Fraud Prevention Manager calmly notified her that this was unfortunately a classic example of an investment scam but assured her that the Fraud Prevention team would be there for her and give her the support she needed. They worked closely with Mrs. C., explaining all the red flags and giving her reassurance on how to protect herself from bad actors in the future.
While the Fraud team helped Mrs. C. understand what happened and why, the local Bank Midwest branch immediately contacted her son, who acted as her representative. They opened a new account online and deposited enough funds to cover her overdrawn account. This gave Mrs. C enough peace of mind to continue with her vacation. She expressed immense gratitude for the care and understanding shown by Bank Midwest during her experience writing:
“I can honestly confirm I have never in my 69 years been treated so well with so much compassion and understanding by any bank. I have worked and lived all over the country for decades. We are still on vacation and enjoying our restored existence! Thank you to all the bankers who made our recovery possible!”
Red Flags: Common Warning Signs of Investment Scams
To help you stay vigilant against investment scams, we have created an informative infographic highlighting the key warning signs to watch out for. This visual guide highlights 6 red flags to help you identify potential scams and protect your financial well-being.
Protecting Yourself: Practical Tips and Expert Advice
To protect yourself from investment scams, follow these practical tips:
- Do your research. Investigate before investing and check credentials.
- Be skeptical of high returns. If it sounds too good to be true, it almost always is.
- Avoid unsolicited offers. Scammers often use these methods to reach potential victims.
- Take your time. Do not rush; if you feel pressured to make quick decisions, this is a red flag.
- Verify the investment. Ensure the investment is registered with the appropriate regulatory authorities.
- Protect your personal information. Secure sensitive information.
- Be cautious of unusual payment methods, such as cryptocurrency or wires, which can be difficult to trace and recover.
- Educate yourself. Being informed can help you recognize and avoid scams.
- Consult experts. If you are unsure about an investment opportunity, seek advice from a trusted financial advisor.
- Report suspicious activity. If you suspect you’ve encountered an investment scam, report it to your financial institution.
Sources:
Cryptocurrency Investment Fraud, Federal Bureau of Investigation
What To Know About Cryptocurrency and Scams, Federal Trade Commission
Crypto Investment Scams, American Bankers Association