Do you occasionally see adverts that offer profitable investments? They promise secure and a super interesting return on invested money … It looks tempting, but can be a scam. So the rule here is: look before you leap.
Investment scams can take several forms
It may not be easy to understand investment offers and scammers can take advantage of this. They are coming up with more and more sophisticated ways to lure you in. But the basic idea is always the same - they're trying to make you think you're going to get rich.
- Sometimes a scam starts with a small amount
Maybe less than 10,000 CZK... On this small amount the scammer will very credibly show you how the value of your investment is growing. Once you believe it's working, they will get you to invest more.
- 42% of investment scams start with online advertising
They often abuse well-known companies, such as CEZ, or celebrities such as Petr Pavel, Andrej Babiš and others.
- 37% of investment scams start with a call to collect the return on an appreciated investment
Even if you've never invested. To get your money, you must first send a "fee" of sorts. Surprise the scammer by verifying him/her.
How can the scam work?
An advert on the internet or a fake website offer profitable investments (in stocks or cyptocurrencies).
On this site you leave your contact details, often a telephone number.
A fake investment advisor contacts you over the phone and in a very trustworthy and lengthy way explains everything to you.
He tries to persuade you to begin sending money to an investment account, or will immediately offer you help using software or an application which you should download into your device. (Do not ever do this, as you are allowing the scammer to take control of your device without your knowledge.)
To make it easier for you to believe him, he sometimes offers you the option to invest in small amounts, 5,000 perhaps. So you can try it out and see how it “works”.
Then on a fake investment website he can show you how to get a return on the investment. The website looks highly professional and seems trustworthy. The website target is to convince you that the investment really does work and persuade you to send more money.
- The problem begins when you want to withdraw your yield or end the investment and have the money returned. The advisor will delay payment of the money and persuade you that you also need to pay various taxes and fees. But even after paying them you will not receive your money.
If you fall for a scam, the scammers will probably try to persuade you to enter a false purpose of payment (e.g. holiday, purchase of a car, etc.). The aim is to prevent the bank from warning you in time about the threat.
How should you protect yourself?
Check to see who you are communicating with.
Do not share any access or password details to your account or card number.
Do not install any software/applications based on a phone call. As has already been said, you will be giving scammers unlimited options of how to steal your money.
Be careful what you confirm and who you confirm it with.
Request a draft contract from the other party and read it carefully. Scammers usually offer investments without any contract documentation which would have to be signed.