Studies have shown one in five Britons between the ages of 16 and 34 have been scammed in recent years and as younger people step foot into the world of business and investing the stakes have never been higher. Head of Digital Finance School at Arden University, Dr Hassaan Khan, spoke exclusively to Express.co.uk and shared the most common types of scams to be aware of – as well as how to avoid them.
Investors are always cautioned against making uninformed decisions with their money and often turn to online resources and information to help.
However, this provides many deadly opportunities for them to be taken advantage of, regardless how cautious they believe they are being.
Spotting a cryptocurrency scam can sometimes be a bit more obvious, such as adverts offering highly unrealistic returns or aggressive, pressurised sales techniques and incentives to buy certain investments or coins.
Mr Khan also cautioned anyone told “you’re buying in at the perfect time” on a deal that offers high returns with little or no risk is a massive red flag, and said: “Whether in cash or cryptocurrency, free money promises are always fake.”
While every potential investor may inevitably come in direct contact with a scammer, there are some safeguards that can prevent absolute devastation, as Mr Khan explained.
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He said: “Don’t put money in a virtual currency or cryptocurrency if you don’t really understand how it works, and don’t speculate in cryptocurrencies with money you can’t afford to lose.
“Don’t invest in or trade cryptocurrencies based on advice from someone you’ve only dealt with online.
“Don’t believe social media posts promoting cryptocurrency giveaways.
“Don’t share your ‘private keys’, which enable you to access your virtual currency, with anyone; keep them in a secure place, preferably offline, where they cannot be hacked.”
Mr Khan shared the four most common types of scams that investors could fall victim to.
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Mr Khan shared: “Although stakeholders can often quickly find these fake apps and get them removed, that doesn’t mean the apps aren’t impacting many bottom lines. Bitcoin News has reported that thousands of people have already downloaded fake cryptocurrency apps.”
He added that misspellings in the copy or name of the app can be a good indicator of a fake app and inauthentic branding, strange colourations or an incorrect logo should be red flags.
Social media
Many large, reputable companies make an effort to have organised, professional and attractive social media pages tailored to their audiences and will usually interact with their ambassadors, founders and other staff or stakeholders through these platforms.
However, so-called ‘catfish’ profiles are almost as old as social media itself, and Mr Khan noted: “You can’t be sure that you’re not following imposter accounts. Fake accounts are everywhere.”
Imposter accounts can sometimes copy the style, branding, images and even wording from the legitimate social media profiles, causing chaos and generally using the original person or company’s credibility to find willing victims.
Mr Khan warned: “The same applies to cryptocurrencies, where malicious, impersonating bots are rampant. Don’t trust offers that come from Twitter or Facebook, especially if there seems to be an impossible result.”
Scam emails
Email scams, otherwise known as phishing, impersonate a legitimate company and generally urge the recipient to take immediate action usually citing the safety of their data and funds as the reason.
Mr Khan advised potential investors: “Is the email the exact same, and are the logo and branding identical? Can you verify that the email address is legitimately connected to the company? Scammers often announce fake ICOs, or initial coin offerings, as a way to steal substantial funds.”
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