How to Recognize and Avoid Online Investment Scams

ONLINE INVESTMENT SCAMS​

Check the registration of an individual or business trying to sell you investments or investment

In this blog post, we’ll discuss the most common types of online investment scams and provide tips on how to avoid them.

With the rise of the internet and the increasing number of people looking for ways to make money online, scammers have become more crafty in their attempts to deceive unsuspecting individuals. But fear not, armed with the knowledge we’ll provide,

you’ll be able to protect yourself and your hard-earned money from these predators. So, let’s dive in and learn how to recognize and avoid online investment scams!

In conclusion, online investment scams are becoming more prevalent and sophisticated. However, with a little bit of research, common sense, and caution, you can protect yourself from these fraudulent schemes.

Remember to always investigate any investment opportunity before committing funds, remain skeptical of promises of quick and easy money, and be wary of unsolicited messages or emails.

By following these simple tips, you’ll be able to keep your money safe and avoid falling prey to online investment scams. Stay alert, stay informed, and stay safe.

Common online investment scams​

Advance Fee Scheme

In an advance fee scheme, the victim is persuaded to pay money up front to take advantage of an offer promising significantly more in return. The catch is that the scammer takes the money and the victim never hears from them again.

Scammers often target investors who have lost money in a risky investment. They’ll contact the investor with an offer to help recover their losses. They may say they will buy or exchange the investment at a substantial profit to the investor, but the investor must first pay a “refundable” fee, deposit or taxes. If the investor sends more money, they’ll lose that, too.

Advance Fee Scheme

Investment scams are often pulled off by a team of people who set up a makeshift office, called a “boiler room”. To convince you their company is real, they might send you to the company’s website, which looks very professional. They might also set up a toll-free number and a respectable address to make the company seem legitimate.

However, the company doesn’t exist. Everything on the website is fake, and the office is just a post office box or temporary office. By the time you realize you’ve lost your money, the scammer will have closed up shop and moved on to another scam.

Exempt Securities Scam

When a company wants to sell securities in Canada, it must file a prospectus with securities regulators. Exempt securities are an exception. They may be sold without a prospectus, but they’re limited to accredited investors or certain other conditions.

On their own, exempt securities aren’t scams. But some scammers pitch fraudulent investments as “exempt” securities. Be suspicious if you get an unsolicited phone call or email about a hot tip on promising business that is about to “go public”. You may be told that the investment is only available to very wealthy people, but an exception will be made for you. You could be asked to sign some paperwork that misrepresents your income or net worth. If you have to lie about how much money you have, you are dealing with someone who breaks the rules.

Forex Scam

The foreign exchange (forex) market is considered to be the largest and most liquid financial market in the world. Investors buy and sell currencies with the aim of making money on changes in exchange rates. But trading in foreign currencies can be very risky.

Forex ads promote easy access to the foreign exchange market, often through courses or software. But foreign exchange trading is dominated by large, well-resourced international banks with highly trained staff, access to leading edge technology and large trading accounts. It’s extremely difficult to consistently beat these professionals. You may not be told how risky forex trading is.

Offshore Investing Scam

This scam promises huge profits if you send your money “offshore” to another country. In most cases, the goal is to avoid or lower your taxes. Be skeptical of tax avoidance schemes – you could end up owing the government money in back taxes, interest and penalties.

There are other risks of offshore investing, too. If you move your money to another country and something goes wrong, you won’t necessarily be able to take your case to a civil court in Canada. It may be impossible to recover your money.

Pension Scam

This scam targets people who have retirement savings in a Locked-In Retirement Account (LIRA). In most cases, you can’t withdraw money from a LIRA until you reach a certain age, usually 55 or older. There are usually limits to how much money you can take out each year, and you’ll likely have to pay tax on the money you withdraw.

The scam is often promoted in ads as a special “RRSP loan” that lets you get around the tax laws and tap into your locked-in funds. To get the loan, you must sell the investments you hold in your LIRA and use this money to buy shares of a start-up company the promoter is selling.

In return, the promoter promises to loan you back 60% to 70% of the money you invested. They will keep the rest as a fee. You’re told you’ll get cash, pay no tax on it, and still hold a valuable investment in your LIRA. But the investment you buy may be worthless, and you may never see the loan. You could lose your retirement savings.

Ponzi Or Pyramid Scheme

These schemes recruit people through ads and e-mails that promise everything from making big money working from home to turning $10 into $20,000 in just 6 weeks. Or, you may be given the chance to join a special group of investors who are going to get rich on a great investment. The invitation might even come from someone you know.

Investors who get into the scheme early may receive high returns fairly soon from what they think are interest cheques. They’re often so pleased that they invest more money, or recruit friends and family as new investors.

But the investment doesn’t exist. The “interest cheques” are paid from the investors’ own money and money from new investors. Eventually, new people stop joining the scheme. There’s no more money to pay out and you don’t see another cent. That’s when the promoters will vanish, taking all the money with them.

Pump And Dump Scam

In these schemes, scammers work through lists of potential investors to promote an incredible deal on a low-priced stock. You don’t know that the person or company contacting you also owns a large amount of this stock and the stock may not represent a legitimate business.

As more and more investors buy shares, the value of the stock rises sharply. Once the price hits a peak, the scammer sells their shares and the value of the stock plummets. You’re left holding worthless stocks.

Blockchain Private Key Finder​

Secure Storage

The first step in protecting against the loss of private keys is to ensure that they are stored securely. 

This means using a secure wallet or storage system. It is important to note that Solutions for Lost Private Keys should not be stored on a computer or other digital device that is connected to the internet.

This is because malicious actors may be able to gain access to the device and steal the private keys. Instead, private keys should be stored on a secure, offline device such as a hardware wallet or a paper wallet.

It is also important to ensure that the private keys are backed up. This means that if the primary storage device is lost or stolen, there is a backup that can be used to access the funds. This can be done by backing up the private keys to a secure cloud storage system or even writing them down on a piece of paper and storing them securely.

Solutions For Lost Private Keys

Blockchain Security

In addition to secure storage of private keys, blockchain users should also take steps to ensure the security of their blockchain.

This includes using strong passwords, two-factor authentication, and other security measures.

It is also important to ensure that the blockchain is regularly updated with the latest security patches, as malicious actors may be able to exploit vulnerabilities in older versions of the blockchain.

Finally, it is important to ensure that the blockchain is regularly monitored for suspicious activity. This can be done by using blockchain analytics tools, which can detect and alert users to any suspicious activity on the blockchain.

Paper Wallets87%
Hardware Wallets76%
Social Recovery 65%

Recovering stolen crypto

Reclaim your crypto Assets

There have been numerous cases of crypto users losing their cryptocurrency wallets and keys. Early crypto miners are among the most affected as many used their personal computers to mine and host their wallets and keys. At the time, many of them had no idea that crypto prices would skyrocket in the future.

It is impossible to tell just how many crypto wallets and keys have been lost due to users simply deleting them, but the number is deemed to be significant, with the number of permanently lost or destroyed Bitcoins estimated in the millions.

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For those looking to regain access to previously stored wallets or keys on their computer hard drives, current data recovery technology can help to recreate deleted files, but there’s no guarantee you’ll recover a crypto wallet intact.

Key Recovery Services

Crypto recovery team services can help in the recovery of lost or stolen keys. Most of them rely on massive processing power to brute-force the right key combination to a wallet. The firms usually require the user to remember part of the lost keys. Even small snippets of seed data significantly reduce the processing time.

 

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