How to spot and avoid investment scams

We’ve all been told not to believe everything we see on social media, but it’s easy to be drawn in by people sharing their successful investments and luxury lifestyles. Scammers know this and use the promise of financial success to make investment scams blend into the content we’re already used to seeing. 

They can get to you through adverts, posts, comments or direct messages, often while pretending to be a person or brand you already trust. They may pose as successful investors, financial experts, celebrities or legitimate investment firms, using fake profiles, hacked accounts, paid adverts or AI-generated content to look convincing.

They may try to tempt you with an investment tip, competition, or exclusive offer, then encourage you to click a link, share information or move the conversation somewhere more private where they can pressure you to invest.

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Historically, boiler room scams used to rely mainly on aggressive cold calling. Today, scammers use phone calls, emails, social media, and messaging apps, but the tactics are much the same.

They pressure people to invest quickly in high-risk or fake opportunities before they have time to think or do their own checks.

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This is a type of market manipulation scam where scammers will use social media, websites, forums and messaging apps to drive interest in an asset they already hold.

As more people buy, the price is boosted (the “pump”). Once the price peaks, the scammers will sell their holding at the inflated price (the “dump”) causing the price to crash and the scammers will walk away with the profit.

Scammers often rely on an investor’s fear of missing out on “exclusive”, “time-sensitive” offers to pressure them to act quickly.

This type of scam can apply to stock or cryptocurrency but they all end the same way; if the scammers sell before the victim, they’re left with nothing but  a bad investment.

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Recovery scams target people who have already lost money to a scam. This could be an investment scam or another type of fraud. Scammers then pose as organisations or individuals who claim they can help recover the money you lost.

These scammers can appear credible by impersonating trustworthy parties such as liquidators, lawyers, charities, or even the company that originally scammed you. In some cases they can even pose as victims who have successfully recovered their losses to support their claims.

Your details may have been shared or sold after the initial scam, so they can use this information to make their approach feel convincing and tailored to you. The reality is, they’ll demand a fee up front - for a service they won’t deliver.

Look out for these warning signs →