Watch out: Investment scams are becoming much more innovative and complex

Last week was a scary one – I received too many emails from the Moneyweb community claiming they were duped by investment scams.

It is easy to dismiss these complaints due to individuals’ naivety, greed and desperation. But two stood out, suggesting that these scams are becoming more complex, personalised, and challenging to spot.

The first one was pretty basic.

Allan (not his real name) received an unsolicited email claiming he had “won” $20 million from the World Health Organisation (WHO).

He was ostensibly the victor in an international competition rewarding the most innovative products launched during Covid-19.

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It is clear that the scammers did some homework – they knew his name and address, and that he had launched a vitamin supplement during the period.

He received a congratulatory letter from the WHO and a letter from the South African Revenue Service (Sars) “approving” the transfer of R350 million into his account.

Both letters were relatively professional, with only a few spelling errors giving them away. Of course, he had to pay R1 500 for the funds to be “released”. Once the payment went through, he never heard from them again.

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An even more innovative example

Another community member, let’s call him John, sent through details of a much more complex and innovative scam. I believe many more people would have fallen for this one.

The scam involves Elon Musk’s SpaceX. SpaceX isn’t listed, but there is speculation that it will go public within a few years. John took note of this speculation and became aware that members of the public could purchase shares before the listing, so-called pre-IPO shares.

John Googled the topic and found a British company purporting to facilitate the sale of SpaceX pre-IPO shares.

Such shares are available, but they are very hard to come by as they must be purchased through specialised investment platforms from existing shareholders.

After contacting the company and expressing his interest in acquiring SpaceX shares, an agent contacted John. The agent sent several professional-looking brochures and links to webpages, confirming the firm’s financial registrations and presence on the London Stock Exchange.

The firm’s website looked ultra-professional, and there were numerous press releases about the firm on fake news websites.

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Long story short, over the next few months, John bought three tranches of SpaceX shares through the firm. The agent also contacted him to offer other investment opportunities.

In total, John “invested” around R1.4 million. All the payments went into a South African FNB bank account.

However, he started to smell a rat when he began to question some of the investment opportunities and the performance of his portfolio. The responses became abrasive, and the requested information was not supplied.

He reported the case to his bank and opened a fraud case, but it seems the money has disappeared into the pockets of a very innovative scam.

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Stay vigilant

These recent scams demonstrate a troubling evolution in fraud tactics. Investment scams are becoming increasingly sophisticated, with cybercriminals now employing highly targeted strategies far beyond the traditional 419 and R4 800 Johann Rupert scams.

In Allen’s case, the scam targeted him specifically – although I think it was a lot of work for R1 500.

In John’s case, designing a scam based on speculative news reports regarding SpaceX’s listing is ingenious.

They created the website and online perception that the firm is a world leader in selling unlisted shares. They then waited for the emails to come in.

I implore the Moneyweb community to stay vigilant. The scammers are becoming very good at what they do.

This article was republished from Moneyweb. Read the original here.