In real life, many people often fall victim to investment scams that seem “too good to be true,” where rationality and caution are often overpowered by desire and complacency, leading to being deceived.
According to the latest data released by the Federal Trade Commission (FTC) in the United States, in 2024, approximately 2.6 million Americans reported being victims of fraud, with total losses amounting to a staggering $12.5 billion. This number was significantly higher compared to the $2.5 billion reported in 2023. The consistency in the number of reported victims over the two years indicates a refinement in scam tactics and an increase in fraudulent amounts.
Among these cases, investment fraud caused the highest losses to Americans, reaching $5.7 billion, marking a 24% increase from 2023; followed closely by identity theft fraud, resulting in $2.95 billion in losses.
It is important to note that these figures are based solely on voluntarily reported cases, suggesting that the actual scale of fraud victims could be even larger.
Investment fraud involves deceiving individuals with false yet highly attractive and seemingly credible investment opportunities. Scammers often impersonate legitimate financial service companies, experts, or other individuals through methods such as phone calls, emails, online platforms, or postal mail to lure victims into investing money quickly.
One common form of investment fraud is known as a “pump-and-dump” scheme, where scammers actively reach out to victims through text messages, social media, or dating apps to build trust and promote investment opportunities promising high returns, often involving cryptocurrencies and virtual assets.
At times, scammers may showcase false profits after an initial investment in an attempt to persuade victims to invest further, only to vanish with the funds ultimately.
The advancement of Artificial Intelligence (AI) has made scams appear more realistic, such as creating seemingly authentic investment profit videos using “deepfake” technology or forging the voices of government officials, corporate representatives, family members, or romantic partners to enhance deceitfulness.
John Breyault, Vice President of Public Policy, Telecommunications, and Fraud at the National Consumers League, acknowledged that there is no universal solution to prevent fraud. However, consumers can lower their risks by identifying certain characteristics of scams. Based on research on FTC data, he summarized three recommendations:
Firstly, be cautious of “urgency” in sales pitches. Fraudsters often create time pressure to prompt victims to act swiftly, such as claiming limited profit opportunities, exclusivity in investments, or stating that the market is open for a limited time, leading victims to rush into transferring money.
Secondly, pay attention to “unusual payment methods.” Scammers prefer untraceable payment channels like cryptocurrencies, money transfer services (MoneyGram, Western Union), payment apps, or gift cards. The FTC emphasizes that legitimate investments would not request payments through these means.
Lastly, beware of scams involving “isolation tactics.” Fraudsters may warn victims not to share information with others, claiming that it is a rare opportunity not to be divulged, threatening repercussions for seeking help, or suggesting that reporting the scam could lead to trouble for their loved ones. This psychological manipulation aims to cut off victims from seeking assistance.
Faced with the surge in investment fraud, consumers must remain vigilant. Investment fraud resulting in $5.7 billion in losses for Americans not only represents a figure but also reflects the financial and emotional distress experienced by numerous families. Data from the FTC and advice from experts indicate that identifying the urgency in sales pitches, unusual payment methods, and attempts at isolation are crucial in reducing the risks of falling victim to fraud.
In today’s information age, while technological advancements have made life more convenient, they have also provided new tools for criminals. Protecting oneself begins with skepticism: if an investment opportunity sounds “Too good to be true!” it is likely not legitimate.
(Note: This article is provided for general informational purposes only, without any endorsement. The publisher does not offer investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, consult with your financial advisor. The publisher does not assume any investment responsibilities.)