As usual, if it sounds too good to be true, it is. That being said, here’s our dissection of this particular scam
How It Works
Opening
You see the video, which shows a whole pile of cash with a voiceover explaining how easy it is to milk the system for money. People who fall for it contact the supposed investor through Telegram, WhatsApp, or any one of the new messaging apps. The “investor” seems polite and professional as they ask you to send a few hundred to start through a digital wallet service such as Venmo, Zelle, or PayPal. Alternatively, they ask you to purchase the cryptocurrency yourself through a crypto vendor and then send it to them. Once given, the “investor” supposedly invests your money in the stock market where it starts multiplying “immediately”.
Mid-Scam
Of course, the victim who sees the fictional numbers rolling up wants to get their profits out. When they try, the “investor” claims you need to pay fees on the money before you can get it back. In the beginning, well, the victim knew that stockbrokers have fees, right? It seems reasonable. The few hundred initial investment has turned into a few thousand, what’s the problem with spending a few hundred in fees?
That was the initial investment, the only real money that exists in this game, and it’s not coming back.
Endgame
The scammer tries to extend the con for as long as possible, somehow mysteriously coming up with more fees, more “taxes”, more reasons the money hasn’t come back and just a little more the victim has to pay to get it. It’s always cake tomorrow, never cake today. If the victim starts questioning, the “investor” often resorts to scare tactics, claiming that without payment the victim will forfeit the giant return or saying that if taxes don’t get paid upfront then legal action looms. Any money sent only ends up in the scammer’s pockets.
A pile of money on a video grabs the attention in ways that are difficult to resist. However, cryptocurrency is unregulated, which means there are exactly zero government protections for a would be investor. Furthermore, the usual difference between the easy way and the hard way is that the hard way works. Why would anybody good at investing need your couple hundred to get started? Real stockbrokers are licensed, can be checked on, and don’t contact people directly.
How to avoid online scams
- Use good judgment. Get-rich-quick schemes only work for the person running them. Investments are never guaranteed for a return, that’s why they’re called investments. If it sounds too good to be true, it is. Emotional manipulation works even on self aware people.
- Do your research. Don’t contact someone random on social media without looking up their names, company information, and any complaints lodged against them. This is the Internet, if they conned someone before, that person probably screamed about it somewhere online.
- Don’t give into scare tactics. High pressure scare tactics represent a major red flag in anyone. There is no investment that’s only good “right now!!!!” Time pressure is a hallmark shady sales tactic, and real investors aren’t so blatant about them. People who already have your money also have no ability to sue you, so don’t believe them threatening legal action either. THEY have to be damaged and be able to show it before they could come after you for anything.
- Understand how digital wallet services work. Cryptocurrency works pretty much like cash. Once it’s gone, it’s gone and nearly impossible to get back. Unless you really understand crypto, it’s dangerous to work with at all.
If you’ve been the victim of a TikTok, report it to BBB Scam Tracker. By reporting your experience, you can help others avoid falling for the same scam
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