The Better Business Bureau (BBB) has observed a six-fold increase in losses from investment scams over the past three years.
The BBB has received more than 4,000 reports of investment scams since 2020, with the median reported loss rising from $1,000 in 2021 to almost $6,000 in 2024.
The increase is largely driven by a type of romance scam called “pig butchering.”
“An increasingly common tactic is revealed by an experience of a man from California who told BBB he was traveling through France when he matched on a dating app with a woman calling herself ‘Mei,’” the Bureau says.
“The two talked for months and even made video calls as they got to know one another. Eventually, she brought up cryptocurrency investing as a hobby of hers and convinced Darryl to join her. The two continued to chat on the phone for months, and he invested nearly $1,000. One day, when Darryl went to check the application he used for investing, it appeared to be down. When he contacted Mei, she rebuffed him and disappeared.”
The Bureau also describes an investment scam that uses hacked social media accounts to target the accounts’ friends.
“One woman in Connecticut reported to BBB about a cryptocurrency scam she encountered on social media. Unbeknownst to her, a friend's social media account was hacked,” the BBB says. “The scammer, posing as the friend, said they ran an automated training bot – a program used to trade cryptocurrency automatically according to a user’s guidelines – with guaranteed returns. The account appeared to grow and grow, and eventually Jeanne wanted to withdraw some of it. The scammer, still posing as the friend, said they wanted a 20% commission, which Jeanne paid. Afterward, they disappeared, and Jeanne lost $84,000 in the process.”
The BBB says to be on the lookout for the following red flags associated with these scams:
- Deals involving little-known cryptocurrencies
- Requests to share your cryptocurrency wallet with someone you don’t trust completely
- Strategies offering guaranteed returns
- An investment that takes little effort or time to pull off
- Someone offers their secret strategy or says not to research their claims
- Too-good-to-be-true claims
- A stranger suddenly wants to befriend you
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