Investment scams online and how to protect yourself against them

Demo video message - protect yourself against online scams
Demo video message - protect yourself against online scams

Cryptocurrency investment scams

Investment scams online that cybercriminals conduct make their presence appear to be from genuine online investment firms in order to be able to cheat web users of their hard-earned money. As such, they may contact people seemingly out of the blue to offer them convincing but completely fake opportunities to make huge profits from investing in a cryptocurrency, such a bitcoin. There are many other cryptocurrencies, but bitcoin is the most well-known of them.

In the UK, people who suspect that they are potential victims of fraud if their bank phones them can hang up and phone 159. The service puts them in contact with their bank so that they can find out if a call about something is genuine or not.

Can the new 159 anti-fraud hotline stop impersonation scams? –

https://www.which.co.uk/news/2021/09/…

The first Google search result often leads to a virus –

https://www.askwoody.com/newsletter/…

A single bitcoin is divisible to eight decimal places

A single bitcoin is divisible to eight decimal places. A satoshi (the surname of the creator of bitcoin) is the smallest bitcoin unit in the bitcoin ledger, representing 1⁄100000000 bitcoins; one hundred millionth of a bitcoin. A millibitcoin equals 1⁄1000 bitcoins; one thousandth of a bitcoin or 100,000 satoshis. A single bitcoin has to be broken up to that extent because of the high value of each coin.

On October 8, 2021, at a particular time, a single bitcoin was worth £39,870.84. The price of a coin changes constantly. When the digital currency began in 2011, the price started at $0.30 per bitcoin, growing to $5.27 for the year. Therefore, there are  big amounts of money to be made or lost from buying and selling bitcoin legitimately. That said, I  myself regard bitcoin as a Ponzi scheme that relies on constantly attracting buyers seeking big profits. Its price falls dramatically if very large sales take place, which happens regularly as owners decide to take profits by selling.

Websites run by cybercriminals look like genuine investment websites

Websites run by cybercriminals look as professional as the genuine investment sites and so seem legitimate, but the investments on offer DO NOT EXIST. Therefore,  your money will be stolen if you are taken in by what they offer. Moreover, law enforcement will not even try to recover it or bring the criminals before a court of law. The reason: doing so would mean having to track web IP addresses and banks across many countries.

Typical email bitcoin cryptocurrency investment scams

A typical example of an email that you might receive offering you easy money by obtaining bitcoin  from a fraudulent source – it has to be obtained legitimately by a process known as  bitcoin mining by using a fairly powerful computer – is to use an endorsement by a famous person, such as Martin Lewis, aka the money-saving expert in the UK.

What are cryptocurrency investment scams?

A cryptocurrency is a virtual digital currency that only exists online. If the web goes down, you cannot access your wallet. Legitimate banks do not control these currencies and  they are not in the form of physical money. The ownership of an account and the amount and value of an account exists only in the currency’s encrypted register that exists on many thousands of computers worldwide  Each transaction has to be reflected on all of the computers that make up the register, making it impossible to  falsify. You use money to buy a digital currency and you get money back when you sell it. If you lose your password, your holding of bitcoin is lost forever. Fortunately, there are plenty of tutorials online that educate people about bitcoin, so there is no need to be caught out by scams..

It is now even possible to use PayPal to buy cryptocurrencies. Warning: It is imperative that if you want to invest in one or more of them, you should do thorough research and fully understand the implications before committing your money into investing in any one of them.

Cybercriminals could contact you by phone, email or on social media

Cybercriminals could contact you by phone, email or on social media. To access the investment, the scammers tell you that you need a crypto-wallet. Criminals offer to set these up for you, but they are just helping themselves to your money.

Be extremely wary of promises of high returns. Always do plenty of research and get impartial advice before you involve yourself in such an investment.

Here is a particularly inept bitcoin scam:

Message:
“Hello, you might like to partake in the bitcoin millionaire investment fund. Currently their is a race to grow this bitcoin wallet 3H83z114jBVaXdbLZu6eaVubrogt2oAhSZ to accumulate at least one million dollars worth of bitcoin. Donations of $1,000/$10,000/$100,000 and even the main goal $1,000,000 is welcome. We appreciate your participation and the best of luck to everyone.”

Notice the bad spelling and grammar, which is often a telltale sign of a scam. This scam is a particularly bad one that asks people to donate to the scammer’s own bitcoin wallet.

In the UK use the FCA and Companies House websites to check if a company is valid

In the UK, check the Financial Conduct Authority (FCA) website to see if the firm is registered on the Financial Services Register, or if it is on the list of firms with temporary registration. You can also use the Companies House website to check if a company is valid.

It’s a good idea to check the FCA warning list for known scams and firms to avoid. Whatever you do, don’t ever ever rush into making a decision.

Most other developed countries have their own versions of the FCA and Companies House.

Note well that it is common for firms that are engaging in investment scams to claim to be based in the UK and even claim FCA authorisation. Of course, these firms are unlikely to have UK registration  and do not have FCA authorisation.

Online trading platform scams

Your financial well-being may well depend on your knowledge of the online investment scams and many other types of scams that are operating online.

Fewer people fall victim to trading-platform-investment scams, but they do exist. The fake platforms offer to do the stock market trading on your behalf or allow you to do it via their platforms.

How online trading platform scams work

Scams that use online trading platforms are usually receive promotion online and via the social media. As with other financial scams, the criminals tend to promise high returns and employ fake celebrity endorsements, such as by Martin Lewis of the UK’s Money Saving Expert website. As with most investment scams, the adverts link to websites that look as professional as the genuine investment sites.

People who invest may initially receive  returns from the scam’s platform in order to create the impression that their investment is worthwhile.. Their success will encourage them to invest more money or introduce friends or family to invest. However, as soon as the criminals come to the conclusion that they cannot take the scam any further, they drop all contact and your money is theirs.

Australian investment scam: I lost $50 000 in fake online trading –

https://www.scamwatch.gov.au/get-help/real-life-stories/…

Never jump into anything related to financial matters. Always do plenty of research

You must do plenty of research into online trading before engaging in it.

For example, you need to have a capable computer and multiple-monitor setup in order to be able to trade legitimately and effectively on the stock market. A decent trading computer would have  a high-end processor (by far the most important component), 16 to 32GB of RAM memory and an SSD drive of which M.2 NVMe SSDs are the fastest.

A high-end graphics card is not a requirement. For example, the 3GB  NVIDIA GTX 1060 relatively high-end gaming graphics card and the low-end 2GB NVIDIA GT 710 and the 2GB NVIDIA NVS 510 graphics cards all perform alike when engaging in online trading. All of those graphics cards provide VGA, DVI and HDMI ports, each of which can run a monitor for a multiple-monitor setup. You can convert one standard of graphics output into another by using a converter. For example, an HDMI-to-VGA adapter that can make an HDMI port on a computer run a monitor that has a VGA port.

The links below provide information on the best trading platforms and trading computers.

Best Trading Platforms in 2021 – https://thetradingmarket.co.uk/

Specialist Trading Computers – https://www.multiplemonitors.co.uk/trading-computers/

About Eric Legge 262 Articles
I am an experienced PC technician who has been the owner and sole writer of the PC Buyer Beware! website since 2004. I am learning all the time in this very dynamic, ever-changing field.