It is Trust, that Can Lead You to Financial Destruction.
The Billion Dollar Scam – BBC World Service – YouTube
The hackers and the social media influencer – The Lazarus Heist S2, Ep3 – BBC World Service podcast – YouTube
In 2022 the total financial loss to cybercrime was $10.3 billion, and 2022 was an increase of about $3.4 billion over 2021. This was from the FBI Internet Crime Complaint Center (IC3) report. However, the reported loss is likely less than the actual loss, as many people do not self-report. The good news is that in 2022 there were fewer reported incidents, the number of reported incidents dropped by about 40,000. However, despite fewer reported incidents, the criminals raked in an additional $3.4 billion. This is not much of a success.
To reduce the effects of cybercrime, there must be an understanding of what it is and how it is executed. To do so, the report classifies types of cybercrime, and the most common is phishing. Phishing is using unsolicited email, text messages, telephone calls, etc., supposedly from a legitimate company or person asking for personal or financial information. This information is then used to take over the victim’s computer, it is used to convince them to send money, and it could be argued that phishing is the entry point for many other types of cybercrime. In general, phishing through email is used to initiate the scam process.
Cybercrime is an international multi-billion dollar business that employs hundreds of thousands of people. This is a highly profitable and sophisticated business based on a wealth of knowledge and experience. For the most part, these crimes follow a process, take time to play out, and are executed by highly paid professionals who are very good at leaving their victims penniless. One of the most profitable scams is cyber investment scams. For example, in 2021, the loss was $1.45 billion; in the 2022 report, it is over $3.31 billion, a 127% increase in stolen money. The goal of the investment scam is to wipe out your life savings, that is, to take all of your money.
Often these scams use the “slow roll” approach; they are not a “smash and grab”; they establish a relationship, befriend their victim, and rely on trust. Most of the time, they do not promise wild returns; they promote investment stability and safety, a decent return on your money. These scammers in the past have sponsored legitimate sports teams; the BBC World Service, in their expose “The Billion Dollar Scam,” in excellent fashion outlined how these criminal organizations sponsored professional sports teams in the English Premier League. Here is a safe investment, legally registered, that sponsors your favorite professional sports team, endorsed by one of the team’s players. What could possibly go wrong? Of course, this comes to light after many thousand lose everything. Eventually, the sports teams drop their sponsorships, and in the fine print, the investments state there is no guarantee. Nevertheless, thousands were financially wiped out.
What to do, these start out as conservative investments, but on paper, you seem to make a better than average return. Then your investment advisor, a very close friend, lets you in on a very good deal for a bit more of an investment. You transfer all your money, or they do it for you, to another safe, very profitable cryptocurrency or other investment. Then full throttle, you are on the road to ruin. Next is the closeout; your investment loses money, and there is a margin call; this is startling news to you, the investor, and now you need to come up with even more money to save what little you have. Or you need the money and cannot withdraw it, like the margin call, you need to send more money. They have this down to a science, and you send them 25%, 50% of the investment. This scenario is played out over many months or years. The friendly chats and paper investment reports are lies. Ultimately, it is all gone; a life’s work is now worth nothing.
So what to do? Think of an investment firm supporting a professional sports team, endorsed by one of the players, with very detailed financial reports, registered with the government, and it is all a lie. What to do is “never put all of your eggs in one basket” when investing; assume the worse never put all your money into one firm or its related firms. A warning sign is that you cannot withdraw your money and close the account. Before you get into deep, try to close the account and see what happens. Another point is after years of investing, how often do you know the “financial advisor”? Most of the time, these investments run on automatic pilot; if there is a budding friendship with your advisor, that could be a problem. The reality is trust is intertwined with friendship; it is this basic human trait that is used against the victim. As we all know, it is very difficult to be objective when someone believes and trusts. Unfortunately, not wanting to admit you have been swindled out of every cent you have earned is normal. With that, the best advice in investing is to trust no one.
