11 September 2024 , 20:01
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A new study by a U.S. non-profit promoting good business practices shows the number of scams and volume of money lost by victims are rising worldwide.
New research undertaken by the Better Business Bureau (BBB) reveals that the average amount of money lost by victims of investment scams rose from $1,000 in 2021 to almost $6,000 in 2024. In some cases, victims reportedly lost hundreds of thousands of dollars.
Investment scams involve fraudulent investment opportunities that promise unrealistic and guaranteed returns. Victims are shown fake results, often convincing them to send the fraudster more funds.
The report also highlighted the role of social media contacting and luring in victims, with 60 percent of cases involving social media platforms.
The BBB also noted that the increase is in part due to the rising prevalence of pig butchering scams - a practice in which fraudsters first earn the victim’s trust by forming what the victim perceives as a real romantic or platonic relationship and then persuade them to send money or invest into something dodgy.
“If the victim gets nervous and tries to withdraw their investment, that’s when the scammer and the money disappear,” said Jessie Schmidt, Vice President of the Better Business Bureau. “It’s all a Ponzi scheme. You get your money in, and you never get it out.”
Many of these scams are run by organized crime groups based in Southeast Asia.