The potential for high returns has always sparked interest among investors, but the Better Business Bureau (BBB) is urging caution in a sea of rising investment scams, particularly those tied to cryptocurrency. Reports of fraudulent investment activities peaked in 2023, as per the BBB, tricking unsuspecting individuals with promises of low-risk, high-reward opportunities that seldom pan out.
One method criminals use to gain trust is by exploiting romantic or platonic relationships, adopting a long-con approach that may span months. "Now, they’re actually building up a type of relationship with that person, and they go on for months sometimes," Steve Bernas, president and CEO of the Better Business Bureau of Chicago & Northern Illinois, stated according to a Chicago Sun-Times interview. Meanwhile, a victim of such a scheme, Shalender Singh, found himself out nearly $20,000 after using what he thought was an investment app, only to realize that the platform was part of elaborate scam when he attempted to withdraw his funds.
Social media platforms are frequently used as conduits for these scams. The BBB notes that hacked Facebook pages, unsolicited investment advice through social media, and even WhatsApp messages are methods by which scammers are luring people into their traps. "We're seeing a lot with cryptocurrency where they want you to buy investment cryptocurrency because nobody really understands that," Bernas explained in a statement obtained by NBC Chicago. The sophistication of these scams is evident in their returns; consumers lost more than $4.6 billion to investment swindles in 2023, topping other categories of scams.
To help individuals recognize and avoid potential scams, the BBB advises skepticism toward investments with "guaranteed" outcomes or that tout low or no risk with a high return. "If somebody comes out of the blue or somebody you don’t know promises you something — don’t even fall for it. Move along and deal with somebody you know and trust like a certified finance planner," Bernas emphasized in the Chicago Sun-Times article. Registration with the Securities and Exchange Commission or other investment industry regulators is also a critical step for verification of investment legitimacy. Furthermore, the BBB cautions against any investment that rewards more for recruiting new participants over the actual sale of products, a common sign of pyramid schemes.
Combating these scams is made more difficult by the underreporting that occurs, often due to the embarrassment victims feel once they realize they have been duped. As these scams evolve and adapt to new technologies and social platforms, the BBB urges continued vigilance and a critical approach to any unsolicited investment advice, especially involving the increasingly popular yet frequently misunderstood realm of cryptocurrency.
