Investment scams
An investment scam occurs when a criminal tricks someone into investing money to a scheme or venture that does not exist, ultimately transferring funds to the fraudster’s account. Fraudsters often advertise investment opportunities online, through social media adverts or generic comparison websites and commonly imitate a legitimate brand. The scams promise attractive returns that are usually higher than other retail investment opportunities.
Common investment scams include shares, bonds, cryptocurrencies, pensions and overseas land investment.
How does the scam work?
These scams are highly convincing and appear to be legitimate.
- Fraudsters may hide behind websites, including product or investment comparison websites, which can appear to be legitimate.
- Consumers looking to invest may submit their details to an online form for more information and the fraudsters then call or follow up with an email, often including what looks like a high-end brochure that may use the name and branding of a well-recognised, legitimate bond or investment schemes.
- Once the victim has authorised the payment and the money has reached the criminal’s account, the criminal will quickly transfer the money onwards to numerous other accounts, where it is then cashed out.
- A fraudster may spend a number of months communicating back and forth with no pressure or urgency placed on the consumer in order to build up a sense of trust.
- Other techniques used by fraudsters to convince consumers of their legitimacy include creating a ‘copy-cat’ profile on LinkedIn of a real employee from an investment firm.
Over 50s key target for criminals
“Investment scams are particularly targeted at those over the age of 50, and in the cases FraudSMART members have seen recently, the investment amounts can start from around €5k up to many multiples of this, with some cases reaching between €50k and €600k. While the amounts may be high, victims are not necessarily wealthy customers, but often people who have worked hard to build up a pension and are looking for a last opportunity to top up their finances ahead of retirement.”
Events
3 March – Stillorgan, Dublin
1 April – Irish Congress of Trade Unions (ICTU) event, Wexford
3 May – County Hall, Dún Laoighaire, Dublin
23 May – Monaghan (Hillgrove Hotel)
25 May – Cavan (Lavery Inn)
3 Oct – Dundrum, Dublin
What to look out for and how to protect your money
Red flags to look out for:
- Cold call: You are cold-called about an investment opportunity – i.e. you receive an unexpected telephone call/e-mail/social media message.
- Claims of low or no risk: There is a promise of a guaranteed, quick and profitable return on the investment with little or no risk. All investments carry some level of risk.
- Pressure to act: You feel pressured into making decisions without proper research or due diligence.
- Lack of Transparency: The investment lacks transparency and you cannot access clear and detailed information about the operations, financials, or investment strategy.
- Complexity and Confusion: The investment opportunity is overly complex or difficult to understand.
- Remote access: You are asked to download software to share your screen or give remote access to your laptop to set up a new investment scheme and monitor it, thereby giving the fraudster access to your personal information.
Checklist to avoid investment scams:
- Take your time: It is important to note that there are very few legitimate investment opportunities that require you to hand over or transfer money immediately.
- Research thoroughly: Check the individual and firm for qualifications, credentials, reputation and history.Be wary of brochures that may appear legitimate. Contact the investment firm directly using numbers from their official website or other reputable independent source. The Central Bank Consumer Hub is a good place to start.
- Verify the Information: Check all information with a trusted third party such as a legal/financial professional and consult family and close friends.
If you think you may have fallen victim to an investment scam:
- Contact both your bank and An Garda Siochana as soon as possible. Every reported case of fraud is investigated thoroughly.
- We wary of a repeat scam. If you’ve been a victim of fraud in the past, whoever took your money may keep your contact information and contact you again. This time, they’ll claim they can recover the money you lost but you’ll need to pay a fee first. Hang up on any callers that claim they can get your money back for you.