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The Top Common Investment SCAMS on Social Media Platforms

Making an investment sounds like a good idea, in fact a great idea. Putting funds into something bound to bring returns is mostly a good idea. Investment may vary from trading to event hosting and so on.

But the down side is that Investment Fraud is actually the most common form of scams, unsuspecting people are lured into what they think might be a genuine investment and end up losing untold amounts of money time and effort.

Social media gives us a lot of opportunities to connect to others and share content globally with the push of a button. Scammers use these same social media advantages to increase fraudulent investment opportunities.


Social media gives them access to personal information allowing them to target potential investors and even create the façade of a shared mutual interest. Using various social media platforms, scammers can reach many different people at various parts of the globe at a relatively low cost.

They create fake accounts (Facebook, Instagram, Twitter, WhatsApp etc. to list a few popular platforms), email addresses, create fake but real looking interactive websites and often post links to other website, videos, or photos that make the so called investment look legitimate.

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If a fake investment scheme catches on on any social media, people who think the investment is legitimate
tend encourage others in their immediate circle to invest, if that happens scammers just have to sit back and watch.

Resulting in an ‘affinity fraud’ so to speak where family members, coworkers, friends invest in and then promote an unsuitable investment.

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When the investment inevitably fails, money is lost and interpersonal relationships are affected. The beautiful anonymity on social media makes it difficult to identify and/or find scammers using it to promote their scheme.

How to Identify Investment Scams

avoid being scammed

You can spot investment fraud on social media if you notice any of the following;

  • ‘Not requested for’ offers to invest out of the blue.
  •  Supposed Claims of guaranteed high returns with little to no risk.
  • Offers showing unbiased recommendations.
  • Offers being only available over the phone or for a limited offer.
  • If it sounds too good to be true, it probably too good to be true.

Feel free to contact us via our contact page or live chat options on our website to help review any investment platforms before you make any decision.

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Crypto Asset Scam

Crypto assets include various cryptocurrencies, blockchains, cryptocurrency fund, initial coin offerings, Initial Token Offerings, Initial Exchange Offerings and so on.

Most if not all people use the term “cryptocurrency” to refer to their crypto assets. However, many crypto assets are digital mediums of exchange acting like normal currencies, not everything that is referred to as a cryptocurrency is usually a medium of exchange, but might have other properties.

Note that note all crypto assets are securities. In recent years, certain crypto assets has generated interest from it’s investors. They are usually considered high-risk because of its speculative nature.

Speculation of a crypto asset is usually focused on trying to profit from changes in the crypto’s market value. Enough of that crypto-intro, a fraudster may claim to place an investor’s money in a particular crypto trading platform, promising high guaranteed returns with little or no risk.

Once the person invests, using a digital currency, the fraudster stops communicating with the investor. The scammer then transfers the investor’s money elsewhere making it very difficult for the investor to get back the investment.

Or the scammer could even provide a link to false crypto trading platform simulating investments and as such, creating the illusion that the investors funds are actually turning profit when in reality it isn’t.

The con artist may enquire from the investor to send more money to pay fees and what not, in order for the investor to withdraw unreal profits made through the so called crypto trading platform and the beat goes on.

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How to avoid Investment Scams

If you are already thinking about investing in the cryptocurrency scope;

  1. Avoid big promises of quick returns in profit and unrealistic guarantees.
  2. Make thorough research online before you invest. Check the company’s legibility, reviews and all the necessary facts to confirm authenticity.
  3. Anyone who says payment is via gift cards or transfers or crypto as well, wants to scam you – simple.
  4. Avoid people trying to get you to invest by using complicated instances on purpose, using big words and the likes to confuse you. Something is definitely off somewhere.
  5. When a sense of urgency is created, limited time offers and so on. It’s most likely a scam 

Ponzi Scheme

Pyramid Scams
Image by Trang Le from Pixabay

Remember Charles Ponzi, he made this stuff popular. The scams promise high returns on your investments.

Each new member is encouraged to bring in new investors, but there is no actual investment. The money Invested is used to pay out returns to those drawn into it, creating the illusion of a “profitable” investment.

The only people who make money are the scammers who get their money from the scheme.

How Does a Ponzi Scheme Work?

It requires a constant in flow of new investors’ money or it crashes. Sometimes the OG investors see
returns, they do not usually get all of their money back. The original investors are encouraged to reinvest their funds back into the scheme.

Essentially, the new investors’ money is used to pay earlier investors and it goes on and on. Once people stop turning up, the whole thing crashes.

Sometimes the people behind the Ponzi scheme spend money on administering the scheme and paying out it’s investors, but the majority of investors’ money is usually stolen.

Features of Ponzi Schemes

The following are characteristics of a Ponzi scheme:

  1. Statements and contracts are not associated with a registered firm, and it has documentation that looks obviously fake or out of place.
  2. Talk about grouping your money with other investors.
  3. Supposedly exclusive investments that seem legit enough but aren’t.
  4.  Individuals selling investment products that are not registered to any trade securities.

The year is coming to an end and yes I know a little extra fund would go a long way but that doesn’t mean you should make investments without thinking. With that said, I draw the curtains. Happy holidays!!

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