Investment scams are everywhere on social media. Here's how to spot one (2023)

NEW YORK (AP) — Social media is full of scammers promising guaranteed returns on investment, and consumers lost billions of dollars to them last year.

Troy Gochenour, 50, of Columbus, Ohio, was conned out of $25,800, including $15,800 in borrowed money, in a crypto-mining scam that began with a WhatsApp message from a beautiful stranger.

“I had just moved home to restart my life, after trying to make it in show business in New York, and I was lonely,” Gochenour said. “So I started online dating. Then I got a WhatsApp message that began, ‘Sorry to bother you.’”

Financial scams, including cryptocurrency schemes, cost consumers $3.8 billion last year just in the U.S., according to the Federal Trade Commission, twice as much as in 2021. Such scams are also a problem globally.

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Those who work in the space, including the FTC and Better Business Bureau, say the speed and convenience of the internet, the rise of online payment platforms and apps, and the spread of financial misinformation have all contributed to the increase. They also cite pandemic-era isolation and loneliness.

In Gochenour’s case, he spent several weeks messaging with someone who seemed romantically interested in him before she brought up “liquidity mining.”

Though he’d been a crypto skeptic, he eventually began following her advice and instructions. Scammers like Gochenour’s have become skilled at setting up sites that convincingly look like legitimate cryptocurrency companies, and Gochenour was taken in. After he set up a crypto wallet, it appeared that the money he transferred there was growing just the way his scammer said it would.

“I was hooked on this person,” he said. “And at first it looked like it was working. She said, ‘We could be together, you and I, and make all this money.’”

Then one day, when he had transferred about $5,000 of his own money to the wallet, he woke up to check the balance and the money was gone. When he looked at a website his scammer had directed him to, to try to understand what had happened, he saw a “contract.” He contacted the scammer about it, and she told him to contact “customer service,” who told him to put in another $10,000 in order to get all of his money back, plus bonuses.

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Gochenour continued to add money to his wallet when prompted, despite the money being transferred out each time, until it looked like he had $200,000 coming to him.

“The numbers were all fake, all manipulated,” he said.

When he was told he’d have to pay $35,000 in taxes up front to access the $200,000, Gochenour realized it was a scam. By that point, he had taken out nearly $16,000 in personal loans on top of his $55,000 in student debt, each time lured by promises of even greater rewards. He now works with the Global Anti-Scam Organization to investigate similar frauds and to help educate others.

To avoid being taken for a ride, consider the following:


Most will sound quick, easy, and low- or no-risk. Many involve real estate, cryptocurrency, financial coaching, or gold. Typically, the company uses words like “proven” and “guaranteed,” along with testimonials from people saying they’re on the other side and have benefited wildly. These are most often paid actors and invented reviews, according to Melanie McGovern, director of public relations for the International Association of Better Business Bureaus.

“Watch out for those endorsements,” McGovern said. “And know your friends. If you get a message that seems sketchy from someone’s account, especially someone you haven’t heard from in a while, reach out to them on a different platform. Because someone may be spoofing them.” (Spoofing is a term for when a hacker disguises themselves as a trusted source.)

Offers also tend to come with time pressure: “Make big money fast!” “Once-in-a-lifetime offer, gone tomorrow!” Or elaborate steps that require infusions of more money at each stage, such as the liquidity mining con that Gochenour experienced. The scammer typically paints a picture of what life will be like when you’re rich. But no one can guarantee a return, and anyone who promises a no-risk investment is a fraud.


First, take time to research the offer. Scammers want to rush you, so slow down. Search online for the name of the company and words like “review,” “scam,” or “complaint.”

Second, run the information by a friend or adviser. You may not have gotten an offer like this, but chances are you know someone who has, especially as scams often target specific communities, according to the FTC.

Third, don’t accept any unsolicited offers. If you get an out-of-the-blue call, text, or e-mail about “an amazing investment opportunity,” it’s a scam.

Finally, reject the high-pressure pitch.

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“Legitimate companies let you take the time you need to investigate before spending any money,” says McGovern.

Scammers will also exaggerate the significance of current events, following headlines and tying their pitch to the news. By making an opportunity seem exciting, innovative, and timely, they hope a target will commit without having fully researched the offer.

“Delete, hang up, and walk away,” the FTC advises. “Especially if they want you to take money out of your 401(k) to invest.”


One tell-tale sign of a crypto con is when the scammer asks you to send money in advance for any reason, the FTC warns. The fraudster will often claim this advance payment is to buy something needed for a big return or to protect the money you’ve already invested somehow. Gochenour experienced several versions of this send-money-to-get-more-money approach.

“Never mix online dating and investment advice,” the agency cautions. “If you meet someone on a dating site or app, and they want to show you how to invest in crypto, or they ask you to send them crypto, that’s a scam.”

McGovern said that the real scale of losses is greater than reported, because many people are embarrassed to have fallen for these schemes, and want to hide the outcomes from family and friends. But she encourages people to report the scams to the BBB, the CFPB, the FTC, and the Internet Crime Complaint Center.



In this scam, the fraudster will tell you their “patented,” “tested,” or “proven” strategy will let you make money investing in stocks, bonds, foreign currency, or tax liens. They promise the approach will set you up for life and let you stop working. But after the free events and introductory videos, you’ll have to pay fees up front for the rest of the expensive coaching, with no guarantee of return.

“It’s all part of a marketing scheme to get you to pay thousands of dollars for what turns out to be empty promises,” the FTC warns in its consumer alert.


In-person and online seminars about how to invest in real estate often promote “risk-free” training, luring targets with promises of financial freedom. If the promotional materials and sales pitches make over-the-top claims, be wary. Watch for phrases like “sure thing,” “security for years to come,” or the chance to “rake in money by working part-time or at-home.” Most people never make back the thousands of dollars of up-front fees.


If “metal dealers” or “rare coins merchants” tell you there’s no better time than now to invest, watch out. Scammers in this con typically simply keep your money. The FTC advises consumers to read the Commodity Futures Trading Commission’s precious metals fraud alert before investing in bullion, bullion coins, collectible coins, or gold.


The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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Investment scams are everywhere on social media. Here's how to spot one? ›

Search online for the name of the company and words like "review," "scam," or "complaint." Second, run the information by a friend or adviser. You may not have gotten an offer like this, but chances are you know someone who has, especially as scams often target specific communities, according to the FTC.

What are the most common money scams? ›

Common Scams
  • Advance Fee Scams. ...
  • Tech Support Scams. ...
  • Phishing. ...
  • Emergency Scams. ...
  • IRS or Government Imposter Scams. ...
  • Foreign Money Exchange Scams. ...
  • Counterfeit Cashier's Checks. ...
  • Bogus Debts.

Who are investment scams target audience? ›

Fraudsters target older adults because they often have savings: investments, property, pensions, etc. Older adults may be looking to maximize their investments to help get through retirement and leave money for their children and grandchildren.

How can you tell if someone is a crypto scammer? ›

To protect against cryptocurrency scams, here are some of the common red flags:
  1. promises for large gains or double the investment;
  2. only accepting cryptocurrency as payment;
  3. contractual obligations;
  4. misspellings and grammatical errors in emails, social media posts or any other communication;
Jun 22, 2023

What are the biggest four common cryptocurrency scams? ›

The most common types of crypto scams perpetrated right now include the following:
  • Blackmail and extortion scams. ...
  • "Business opportunity" scams. ...
  • Fake job listing scams. ...
  • Giveaway scams. ...
  • Impersonation scams. ...
  • Investment scams. ...
  • Phishing scams. ...
  • Pump and dump schemes.
May 31, 2023

How to spot get rich quick scams? ›

The five tell-tale signs
  1. Firstly, they offer exaggerated and above-market returns within a short period of time, with the promise of little to no risk.
  2. Secondly, new members are constantly recruited to join the scheme.
  3. Thirdly, there is urgency to join the scheme and no clarity on how the scheme works.
May 21, 2023

How can investment scams be identified? ›

Warning signs it might be a scam

An online contact (a friend or romantic interest) that you've never met in person starts talking to you about investing. Emails, websites or ads with testimonials and over-the-top promises of big returns. High pressure tactics designed to rush you to act so you don't 'miss out'.

How do people fall for investment scams? ›

When faced with financial difficulties or a desire for quick financial gains, people become more vulnerable to scams promising easy money or high investment returns. In such circumstances, the desperation to improve one's financial situation can cloud judgment and lead to susceptibility to fraudulent schemes.

How do I protect myself from investment scams? ›

Steps You Can Take To Avoid Investment Fraud
  1. Verify The License Of The Person Selling The Investment. ...
  2. Verify The Investment Is Registered. ...
  3. Beware Of Promises Of High Rates Of Return And/Or Quick Profits. ...
  4. Be Suspicious Of High-Pressure Sales. ...
  5. Beware Of Unsolicited Offers. ...
  6. Ask For Prospectus Or Offering Circular.

What is the number 1 scamming state? ›

Key Takeaways. Georgia is the state where financial scams are most prevalent, with 437 fraud reports for every 100,000 residents during the first quarter of 2023. South Dakota is least affected by financial scams, with 132 fraud reports per 100,000 citizens. Nationwide, imposter scams are the most common fraud type.

Why would a scammer want to send me money? ›

How Do Money Mule Scams Work? A scammer will pose as someone who might offer you a job, say you've won a sweepstakes or start an online relationship with you. Whatever the story, next they want to send you money – and then ask you to send it to someone else. They often advise you to wire the money or use gift cards.

Who gets scammed the most? ›

Older people are often assumed to be the main targets of financial fraudsters, but younger generations may actually be more at risk to fall victim to scams, research suggests.


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