Texas residents lose in investment scam

Texas residents have reported nearly $500,000 lost to investment scams to BBB Scam Tracker, with many reports detailing new promotional tactics scammers are using that encourage investors to participate in the scheme. By framing an investment opportunity with ‘New Year’ discounts on service, withdrawal, and tax fees, some Texas residents have lost more than $100,000 and cannot recover their funds. BBB’s 2023 Scam Tracker Risk Report found investment and cryptocurrency scams were the No. 1 riskiest scam North American consumers encountered last year. 80% of people targeted by this scam lost money, with a median loss of $3,800.

Investment scams are not modern inventions, but many new technologies are making it easier than ever for anyone to enter the investment scene, opening countless opportunities for legitimate and fraudulent traders. Using the reach and engagement of social media, con artists create highly engaging content and position themselves as an expert source of information, capitalizing on confusing financial terms and unclear processes.

Using sophisticated systems designed to appear like legitimate investment dashboards, scammers mislead their target into believing their initial investment is creating huge returns. Encouraged by what they can see with their own eyes, investors listen to the recommendations of the scammer to invest more of their money into the fraudulent fund with many liquidating financial assets, taking out personal loans, or refinancing their homes. The assumption is they’ll easily be able to recover once they withdraw their funds. Unfortunately, when they attempt to withdraw their money, many victims learn that the ‘trader’ is a fraud.

After attempting to withdraw, investors may be charged a series of service, withdrawal, or tax fees before the money is released to their accounts, and the rates of these charges do not reflect the promotional offer used when they initially signed up for the service. When the fees are paid, the scammer disappears with the remaining investment, access to the dashboard is disabled, and many deactivate the social media accounts they used to initiate contact. Alternatively, the scammer takes these actions immediately after the withdrawal request is made without charging additional fees. In some of the costliest cases, the scammer continually charges progressively higher fees to withdraw, claiming that the total deposit in the fund must first meet a predetermined level before it can be accessed or that additional services must be paid.