Schedule Appointment

Recognizing the Tactics Used by Scammers in Fraud

  • 4 min read

If you have fallen victim to fraud, particularly investment-related scams, this information could be invaluable. Our investigative division frequently encounters such cases, and understanding the tactics employed by fraudsters is crucial. The Association of Certified Fraud Examiners (ACFE), of which we are an active member, offers a wealth of insights and resources to prevent and recover from fraud.

Fraud is a deceptive game:

Often leaving victims unaware until they’ve suffered financial losses. The statistics are alarming; estimates indicate that annual fraud in the US surpasses a staggering one trillion dollars, equivalent to five percent of total revenues. This startling figure translates to approximately 2,700 instances of million-dollar fraud occurring each day. While this might sound unbelievable, our interactions with hundreds of victims daily highlight the prevalence and devastating impact of these schemes.

Victims come from all walks of life, including attorneys, doctors, accountants, executives, and everyday working-class individuals. Fraudsters are cunning operators who employ a carefully crafted approach. They don’t rush into requesting money outright; instead, they initiate contact through various channels, often on social media platforms such as Facebook, Instagram, TikTok, and Twitter.

These conversations initially revolve around unrelated subjects, establishing a sense of familiarity and trust. This preliminary phase can last for weeks or even months, during which the fraudster engages the victim in seemingly genuine dialogue. The fraudster’s true intentions remain concealed as they patiently build rapport.

Fraudsters with no boundaries

Eventually, the fraudster uncover their scheme, often through a celebratory social media post showcasing extravagant events or possessions. This tactic is not meant to directly solicit funds, but rather to evoke envy and admiration, roping victims further into their web of deception. The familiarity built over time lends credibility to the fraudster’s newfound success.

The fraudster’s art lies in making victims believe they are on equal footing, leading them to think, “If they can do it, so can I.” By manipulating this psychological trigger, the fraudster begins subtly introducing the investment opportunity. This step is crucial in leading victims down the path of deception.

The fraudster expertly prolongs the interaction, making the victim eager to learn more. They may introduce the investment as something separate from themselves, a distant opportunity stumbled upon some time ago. Victims become enticed by the prospect of significant financial gains, feeling that they, too, could benefit.

Deal Unfolds:

As the victim’s interest deepens, the fraudster gradually shows the investment deal, often with the pretense that they are merely facilitating an introduction. The victim is introduced to the investment company, which promises substantial returns on relatively small initial investments.

Here, victims face a critical choice: invest more money or attempt to withdraw funds. Fraudsters skillfully maneuver both scenarios. If a victim expresses interest in withdrawal, the fraudster might delay the process, citing additional requirements or fees. Alternatively, they might suggest a higher-tier investment program for even greater returns, enticing victims to commit more funds.

Victims who fall deeper into the scheme may resort to borrowing funds from various sources, convinced by the fabricated account statements they receive. These statements, however, are pure fabrication, often Photoshopped or manipulated to present an illusion of significant wealth.

The cycle continues until victims either run out of money or finally realize the scheme’s true nature. At this point, victims may attempt to reclaim their investments, only to be met with evasion and silence from the fraudsters.

Recovery and Prevention:

Recovering from investment fraud can be a challenging and time-consuming process. While we work diligently to investigate and assist in asset recovery, it’s important to note that government involvement in such cases often requires substantial evidence and significant financial impact.

Preventing investment fraud relies on recognizing the early warning signs and exercising caution when presented with too-good-to-be-true opportunities. Remember that genuine investment opportunities are built on transparency, sound financial principles, and a thorough understanding of the market. By remaining vigilant and informed, you can protect yourself and your hard-earned money from falling prey to these elaborate scams.

If you feel like you are a victim of Fraud of want more prevention, please contact one of our experts here.


Also watch our YouTube video channel for more insight:

Leave a Reply

Your email address will not be published. Required fields are marked *