Cash News
WASHINGTON — A new investigation by the Better Business Bureau (BBB) has uncovered a dramatic increase in reported investment scams, with losses related to fake investment opportunities rising nearly six-fold.
Cameron Nakashima of the BBB said the scams are increasingly involving cryptocurrency. These scams are on the rise, with more and more involving cryptocurrency.
The latest reports to the BBB indicate that investment scams often take the form of long-term confidence scams. Fraudsters fabricate relationships with victims—either romantically or as investment mentors—to gain their trust. This approach has led to a significant increase in losses.
In 2021, the median reported loss was $1,000. In 2024, the median loss reported is $6,000.
“Since the beginning of the year, we’ve received 32 investment scam reports from Washington, totaling over $1.9 million in losses. Most of these involve crypto,” Nakashima said. “One Washington resident recently reported losing $730,000 to a scam cryptocurrency investment website.”
Nakashima outlined three red flags to watch for:
- Be wary of investment “gurus” or romantic prospects you haven’t met in person. Verify their credentials and track record before trusting their advice.
- Exercise extreme caution with deals involving obscure cryptocurrencies or crypto brokerage websites you have not heard of before. Fraudsters often guide you to invest in fraudulent cryptocurrencies or use fake brokerage accounts.
- Watch out for “too-good-to-be-true” offers. If an investment opportunity promises you can’t lose money or guarantees unusually high returns, those are red flags.
Nakashima advised that if someone identifies an investment scam or loses money to one, they should block and report the scam account.
“These crypto and investment scams usually start online on social media and dating apps. If someone you don’t know reaches out to you offering investment advice, you should block them and report them as a scam account,” Nakashima said.
Nakashima also emphasized the importance of reporting scams to the BBB scam tracker and other agencies such as the FTC and FBI cyber crimes. “Whether you lost money to the scam or not, it helps all of us if you report the scam,” he said.
To avoid these scams, Nakashima recommended educating oneself about what to look out for and only investing using trusted brands and businesses that have been vetted and have a good reputation.
The full investment scam study is available to read at BBB.org.