Don't Fall for an Investment Scam

Levo Credit Union®'s fraud specialist, Gabriel J., shares information on investment scams and what to watch out for.

Investment fraud is a growing threat that financial institutions are seeing more frequently. It is a form of authorized fraud, meaning victims are deceived into providing personal information or sending funds, resulting in more than $20 billion in fraud in 2025.

What is an Investment Scam?

An investment scam is when a fraudster tells someone to send funds, with a check or cryptocurrency, to fake companies promising high returns with little risk.

Often, the scammer will reach out to people online via email, text, or social media. They generally build a relationship over days, weeks, or even months, and once they believe they are trusted, they will offer an opportunity to invest.

The investment opportunity is usually guaranteed or low-risk, easy money, or a quick turnaround on your investment. The fraudster wants you to act on impulse and often claims they need to act right now or that the opportunity won't be around forever. Once the funds are transferred via check, PayPal, or cryptocurrency, the fraudster will either end communication or continue to request additional funds until the victim becomes suspicious or runs out of funds to transfer. 

With any scam, it can be difficult to recover your funds, especially if you authorized the transaction from your account. Cryptocurrency adds another layer of difficulty when trying to recover funds due to its encryption, security, and the difficulty of tracing funds.

Tips For Preventing Investment Scams:

• Stop and pause for a minute. The fraudster wants you to act on impulse and think you are missing out on a big opportunity. Hang up or stop communicating with the scammer. 

• If it seems to be too good to be true, it probably is. If you find yourself reviewing an investment opportunity presented to you from a newer relationship, consider whether it seems like a get-rich-quick scheme. Remember, most investments carry some risk of loss of funds and take time to grow.

• Do your own research. Before sending funds, look into the investment company or individual offering it. Verify that they have a legitimate, searchable presence and review feedback from reliable sources, such as the Better Business Bureau. Be cautious if you can’t find credible information or if the details don’t match what you were told.

What to Do If You Are Impacted By an Investment Scam?

If you believe you are a victim of an investment scam, stop communicating with the scammer and stop sending funds. Next, you should contact your financial institution. They may be able to help you do a little more research and find out if it is an actual scam or not, as well as provide next steps.

Depending on the situation, your financial institution will recommend different steps for you to take, and how you might be able to get those funds back. 

If you’re a Levo member and suspect you’ve recently been affected by fraud, contact our Service Center at 605-334-2471 or toll-free at 1-800-568-5711.

Learn More About Other Common Scams

• Check Washing Scams

• Identity Theft

• Impersonation Scams

• Online Account Takeover

• Online Advertisement Scams

• Romance Scams 

• Fraud Prevention Education

Video Transcript:

(0:00) One of the biggest financial scams going on right now are investment (0:04) scams. What this usually looks like is the fraudster reaching out to you online, usually through email, through (0:10) text, or through social media. (0:12) First, they'll get in contact with you. They'll try to build up a relationship, try to become (0:17) your friend, just chat about random things to build up that relationship. (0:20) Then, down the line, sometimes days, sometimes weeks, sometimes months, (0:24) they'll then give you the chance for an investment that they've found. It's usually posed (0:30) as something that is either guaranteed (0:32) or low risk, quick turnaround, (0:34) easy money, (0:35) one way or another.

Then, once they give you that information, (0:39) they're going to tell you where to (0:41) invest the funds, either in fake companies or where to send a check, or sometimes it's with cryptocurrency as well. (0:47) They'll tell you that this is an opportunity, you have to act (0:50) right now, and that it's not going (0:52) to stay around forever. Once you send those funds, whether it's a check or through PayPal or with (0:58) cryptocurrency, they're going to do one of (1:00) two things. Either they will just cut it right there, (1:03) they have your money, (1:04) then they'll ghost you, or they'll continue to talk to you. They'll tell you, "Oh, hey, the investment's doing great, (1:09) but we should get some more funds." They'll continue to try to siphon more and more out of you until (1:14) you get suspicious or until you don't have any more funds to give them. Then at that point, that's when (1:18) they cut the relationship off (1:20) entirely, and they cut you off. (1:23)

Then at that (1:24) point, if it gets to it, it can be really difficult to get your funds back because you authorized the (1:28) payment. Especially when it comes to cryptocurrency, (1:31) because of (1:32) how encrypted (1:33) and secure it is, it's very difficult to trace those funds to wherever they're getting or wherever they're going and (1:38) to get any (1:39) of it back. One thing you should (1:41) do if you ever think that you're talking with someone who's a possible investment scammer (1:45) is just stop to think a little (1:47) bit. Most things, if it seems too good to be true, that's gonna be the case, especially when it (1:52) comes to investments. If there's a quick get rich quick scheme (1:55) for everyone, (1:56) everyone would be rich. But that's usually not the case, especially when it comes to something like investments or cryptocurrency. (2:04)

If you don't know about what you're investing in or what you're buying, (2:07) you should do some research on your own instead of just taking this internet person's word for it. (2:13) Another thing to do is if you have actually fallen victim for a financial scam or investment scam, or (2:19) you believe that you have, you should contact your financial (2:21) institution. They'll be able to help you do a little bit more research, find out if it was an actual (2:26) scam or not, and then they can help you with the next steps. (2:28) It kind of will depend on how exactly the (2:31) scam unfolded, but any officer you speak with at your financial institution, if nothing else, they'll be able (2:36) to give you some good advice on what the next steps would be and how you can (2:39) get those funds back.