The scale of investment scams worldwide blows the mind, and the challenge of staying safe and fighting back is getting more difficult by the day. One of the best ways to improve your resistance to investment scams, and to keep those around you safe, is to become more knowledgeable about investment frauds. The following discusses 20 common questions we get asked about investment scams. I hope it helps you to stay safe, and if you have fallen for a scam to learn the lessons and regain the confidence to get back online again.
## 1. How did I fall for this investment scam?
One of the first questions victims asked themselves is – how did I fall victim to this investment scam? Nearly everyone is aware scams exist, and most people think it will never happen to them. However, investment scams catch people from all walks of life, so you don’t have to be stupid, naive or careless to fall for investment scams. Many of Rexxfield’s clients (victims of scams) are professionals, highly educated and financially savvy. How did it happen?
Yes, there is a time to assess how and why it happened, and what changes you can make to reduce the chances of it happening again, but do not torture yourself for becoming a victim. In the words of Forrest Gump, S%&t happens, and can happen to anyone:
Sh#t Happens! – Forrest Gump
Common Triggers
- Investment scams often exploit human psychology, and so you should be aware of how you were exploited, for example:
- FOMO – scammers will exploit your fear of missing out to reduce your resistance to their scam
- Desire for quick gains – let’s call it like it is – greed makes becoming a victim more likely. This isn’t victim blaming but understanding that there is a relationship between how much we pursue quick gains and our susceptibility to falling for investment scams.
- Pressure to act quickly. Be aware of a high pressure sell to act fast – high-pressure sales tactics which can be a tell tail sign of a scam “whoever makes haste with his feet misses his way.”
- Exploitation of trust of authority. Investment scammers will pretend to be from the government, tax office or tech companies and will convey a fear of detrimental outcomes if you don’t do what they say.
- Use of complex jargon to confuse victims. The scammers may overwhelm you with technical information and convince you that they are legitimate because of their seemingly high technical knowledge.
- Investment scammers will use commons triggers, such as reciprocity, social proof, and tapping into the values they discover about you so that you feel stronger in those values.
- Emotions – there’s no surprise that an attractive face and infectious personalities are used to lower our defences to making falling for investment scams easier. For example Romance Scams, Confidence Scams or “Pig Butchering” Scams exploit the emotions of loneliness and the genuine human need for companionship.
- Scammers continually evolve their tactics, making even savvy investors vulnerable. Remember, falling for a scam doesn’t reflect on your intelligence; these criminals are skilled, experienced and well-funded manipulators.
Further reading and reference, The psychology of scams and why we fall for them
## 2. How can I get my money back?
Usually the second question is – how can I get my money (or crypto) back? Unfortunately, recovering funds lost in an investment scam is usually challenging, whether it’s a crypto or fiat currency scam. Success will depend on many factors, some beyond your or anyone’s control, but some steps will increase your chances of a successful outcome:
- In all cases, speed is one of the most important factors.
Do NOT delay taking action.
Other steps will differ depending on specific factors; such:
- as you and their (the criminal’s) location,
- the loss size,
- what type of asset you lost,
- how it happened and more.
- I’m going to differentiate next steps by two asset classes – fiat and crypto:
For fiat currency investment scams:
- Fiat investment frauds are scams involving traditional national/government-backed currencies such as USD, GBP or EURO.
- If the loss has happened recently, contact your bank or credit card company immediately to report the fraud. Particularly if you live in a developed country. If the scam only just happened, the bank may be able to stop the flow of funds and reverse at least some of it before it is all laundered.
- If relevant to your country, file a complaint with your government with an agency like the Federal Trade Commission (FTC) as well as your local law enforcement.
- Contact Rexxfield and ask us how we can help. Through our networks, we can often follow the money trail through bank accounts, and we also have relationships with litigation lawyers who can hold your bank accountable for poor conduct – sometimes working on a contingency basis (no win no fee). We will certainly gather online evidence that may be essential to you getting a positive outcome, as well as help you jump the queue to get your recovery faster.
For cryptocurrency investment scams:
- The typical advice you see online, and even from AI models if you ask them, is to file a report immediately with the FBI’s Internet Crime Complaint Center (IC3) or similar. And while this should be done at some stage, we don’t recommend that it should be your first step for most crypto investment scams. Why?
- Because the reports are difficult to fill out, and the stress you are under does not make it any easier.
- You will not get an immediate response, and by the time you do, your crypto may be long gone.
- You should contact Rexxfield first. The ic3 report is a preverbal dog’s breakfast – not at all easy for people to complete. Get our help so that it’s filled in properly, or else a badly executed submission could cause fatal delays to your case.
- Any number of statistics you find online show how desperately large the cybercrime problem is, and so your scam must compete with others for the law enforcement resources, which are a limited resource.
- World-leading blockchain tracing software Chainalysis has calculated that illicit transactions exceed USD$20b p.a.
- In September 2024, the FBI reported US citizens lost USD$5.6b in crypto currency fraud schemes in 2023
2023 saw a 45% increase in crypto fraud from 2022!
- I don’t think the FBI cyber-crime budget increased by 45% to keep up, do you?
- If the investment scam involved sending your crypto to an exchange wallet, then if you are quick, it may be possible to freeze the crypto before it is laundered and gone. However, in most cases your crypto will be going to a non-custodial (non-exchange) wallet, and not interceptable at that point without access to the deposit address private keys.
In both cases, gather all documentation you can related to the investment scam.
In all cases, contact Rexxfield first. Rexxfield will improve your chances of getting your money back. Find out how at Rexxfield – Asset Recovery Strategies for Scam Victims
## 3. What should I do first after realizing I’ve been scammed?
If you are still in contact with the scammer, WONDERFUL! Common advice online is to stop all communication with the scammer immediately, BUT our advice and experience says that you should stall/delay but DO NOT cut them off or tell them you know it is a scam.
- DO NOT SEND ANY MORE MONEY
- STALL / DELAY / BUY TIME
- DO NOT TELL THE SCAMMERS THAT YOU SUSPECT A SCAM.
Why?
Because we can gather more evidence if you are still in communication with the scammer, and if their online infrastructure is still up and active.
Also, do not warn them or make them suspicious that you are onto them, as they may get nervous, liquidate assets, go to ground and reappear later in copied infrastructure. Scammers always want more, so that greed can be used against them. Contact Rexxfield, and we may even try to scam the scammer!
Rexxfield has the best success when we can connect with and socially engineer your scammers. We frequently can trick them into revealing valuable intelligence that gets them stopped and their assets burnt down. If their websites are still online, we can scrape them for intelligence, find connections between their digital assets and increase the catch-rate of the bad guys.
- Certainly, if your loss involves compromised accounts and passwords, you should change them immediately
- Do NOT reuse passwords – ever, for anything you don’t want hacked.
- Use a strong password manager or offline resource such as a physical book to manage passwords.
- Setup 2FA for any important accounts.
- Document everything related to the investment scam, including communications and transactions.
- Record and document all phone numbers, emails, websites, names, social media accounts.
- Take screenshots – especially of faces and identifying information.
- Contact Rexxfield immediately.
- After checking with Rexxfield, report the fraud to relevant authorities (as mentioned earlier) and inform your bank or financial institutions about the scam.
## 4. Should I report the investment scam to the authorities? If so, who?
Yes, but you should talk to Rexxfield first. This is because reports like the FBI ic3.org are long and difficult to fill in properly. It will take a long time for you to get a response, and by then perishable intelligence may be gone. Like a wild west possie on the trail of an outlaw, we need to get riding before the trail goes cold.
When it comes to reporting to authorities, we will help you, or even do it for you.
- These are some of the other locations recommended by government agencies that you should consider reporting the investment scam to:
- Local law enforcement
- Federal Trade Commission (FTC)
- Securities and Exchange Commission (SEC) for securities-related scams
- Commodity Futures Trading Commission (CFTC) for commodity-related scams
- Your state’s securities regulator
But again, check with Rexxfield, especially if the investment scam is ongoing so that we can gather valuable evidence that can help you before the investment scam assets are shut down.
## 5. Will my bank reimburse me for the lost funds?
It depends. It is possible for fiat currency scams, but very unlikely for crypto scams. It’s unlikely for crypto investment scams because you didn’t send the money directly to the scammer from your bank. It’s likely that you sent money from your bank to a legitimate centralized exchange and then bought crypto and then sent that crypto from the exchange). So the bank doesn’t know what you have done at the exchange and isn’t responsible for stopping you.
Fiat scams are a different story, and it depends on your case.
- Banks may reimburse fraudulent credit card charges if reported promptly
- Wire transfers and cash transactions are usually not reimbursed, but sometimes some of the money can be stopped and returned (especially if the trail involves intermediary banks).
For cryptocurrency scams:
- Most crypto transactions are irreversible and not insured by banks.
- The exchange COULD be liable, if they should reasonably have known that you were transacting with a known investment scam syndicate or sanctioned entity that their systems should have detected and warned you about.
You can check with your bank and exchange about their specific policies regarding investment scam reimbursement, but most of the time the horse has bolted, and getting your money back becomes reliant on law enforcement action.
## 6. Can I sue the scammer to recover my losses?
Civil action is a possible course of action, but success is difficult and dependent on many factors, such as:
- Identifying the real identity of and locating the scammer (which is what Rexxfield tries to do). Most scammers are not Berni Madoff’s operating in plain sight. Most are in the shadows, in countries where it is difficult to reach them.
- Gathering sufficient evidence (which is what Rexxfield does very well)
- Does the scammer have recoverable assets (This is a lottery. You can’t sue someone who has no assets)
- The location of the scammer and your location (for jurisdiction)
- Whether the scammer is touchable by law enforcement (for example, if they are North Korean, you have no chance)
- But by far and away the biggest risk factor is whether law enforcement and then a prosecutor decides to take on your case and follow it through to a successful conclusion.
Consider consulting with a lawyer specializing in investment fraud cases.
Be aware that legal action can be costly and time-consuming, with no guarantee of recovery.
## 7. How can I protect myself from future investment scams?
There is no full-proof way to protect yourself, but these general ideas should reduce your susceptibility:
- Look at your motives for investing. Don’t be in a rush for quick gains.
- Do the best due diligence you can, or ask trusted others to do help you in this. Rexxfield offers a Deep Dive Due Diligence service that can alert you to red flags on key individuals running a prospective investment opportunity.
- Be skeptical of unsolicited investment offers, and remember that for the fish, the bait is a free-feed, with a catch!
- Verify the credentials of any investment professional or company.
- Do not click links in emails and SMS (text) messages.
- Don’t rush into investment decisions; take time to think it over. It’s ok if some pass you by. There will be others. Better safe than sorry.
- Be wary of promises of high returns with little or no risk.
- Keep your personal and financial information secure (don’t repeat passwords, use good computer security software, use 2FA).
- Do not action, buy, sell or allow permissions for crypto sent to you for free, such as in an airdrop. It could be a trojan-horse designed to open and empty your wallet.
- Always type URLS for critical websites in the browser, do not click from links.
- Double check phone numbers by checking them on the legitimate website.
- Check email URLs VERY carefully to make sure they are the real one.
- Do not allow others to have remote control over your computer to do tech support etc.
- There are many other things – far too many to list, so stay informed about common investment scam tactics.
## 8. Are there any organizations that help investment scam victims?
Yes – REXXFIELD.COM. It’s what we do, and have been doing since 2008. Our longevity is our proof of our legitimacy. (Our media exposure helps too).
As for NPO’s and government agencies, consider reading information at:
- Public International Cyber Crime Disruption Organization (PICDO.ORG), a US-501(c)(3) registered charity that works to disrupt cyber crime and the slavery used to support it.
- FINRA (Financial Industry Regulatory Authority) offers support and resources.
- The National Center for Victims of Crime provides assistance and information.
- The AARP ElderWatch program helps senior victims of financial fraud.
- Many countries and states have investor protection offices that offer support to scam victims.
## 9. Will my personal information be safe, or am I at risk of identity theft now?
The loss of personal data depends on the scam. If you have been scammed through an Office365 hack, then potentially everything you have saved in your online Office account could be exposed. You should always take precautions, and a previous answer provides many things you can do to limit the damage and prevent future scams.
Consider these precautions:
- Monitor your credit reports regularly.
- Consider placing a fraud alert or credit freeze on your credit and bank cards.
- Be vigilant for signs of identity theft or additional scams.
- Change passwords for all your online accounts, especially financial ones.
- Change and set strong passwords plus 2FA using authentication apps.
- Be alert to identity theft. This can be devastating and hard to fight.
- Be alert to new scams – there is a high chance your data will be sold and used by others to try and scam you in some other way.
## 10. How long does it typically take to resolve an investment scam case?
- Resolution time varies greatly depending on the complexity of the investment scam. Rexxfield resolves some with six months, yet others are still ongoing after two years.
Here’s one of the quickest, but they’re not always this successful:
Cybercrime Firm Rexxfield Recovers Over $670,000 BTC Stolen From U.S. Investor
## 11. What are the chances of catching the scammer?
Chances vary depending on many factors, and many points of failure that can end a promising case. However, these are some of the key factors that frequently pop up in the cases we handle:
- The sophistication of the scam. On the one hand you have an amateur on his first scam is very different to a state-backed actor. Chalk and cheese.
- What country the investment scammer is located in.
- Where you are located.
- The amount lost.
- How long ago did it happen.
- The number of victims identified.
- Is the investment scam infrastructure still active.
- The amount of evidence available and collected.
- The dedication, resources and motives of the law enforcement team and prosecutor.
Read more about current crypto crime rates and trends in the FBI – Internet Crime Report (2023)
## 12. Can I claim my losses on my taxes?
You may be able to claim investment scam losses as a theft loss on your taxes. Each situation and country is different, but Rexxfield does sometimes get asked to provide proof that a scam has occurred, and the amount lost, for tax purposes.
- In the USA, the IRS has specific rules for claiming these losses. At the time of writing, these include:
- Losses must exceed 10% of your adjusted gross income.
- You can only claim the amount not covered by insurance or other reimbursements.
- Consult with a tax professional to understand how to properly claim these losses.
Reference: IRS – Theft Loss Deduction
## 13. How will this affect my credit score?
The investment scam itself typically doesn’t directly impact your credit score, but it may directly affect you if:
- You can’t pay bills due to lost funds.
- You take on debt to cover losses.
- The scammer uses your personal information for identity theft.
- Monitor your credit report closely for any unauthorized activities.
Reference: Federal Trade Commission – Credit Reports and Scores
## 14. Should I hire a lawyer?
Most of the time a lawyer will not be your first port of call, because it’s not a lawyer’s job to gather evidence for you or on behalf of law enforcement in a criminal investigation.
Consider hiring a lawyer if:
- The investment scammer is someone known to you, and
- You are considering civil action, and
- You’ve lost a significant amount of money (normally at least six-figures) or
- It involves company losses or matrimonial assets in a divorce.
You should talk to Rexxfield first. We have so many clients who have gone to lawyers and wasted their money. Quite a lot of lawyers come to us for help, when the client could have come to us on their own. Rexxfield will introduce you to good lawyers if and when they become of benefit to you to help you on your recovery strategy.
## 15. Are there support groups for investment scam victims?
Yes, support groups exist. We recommend local support groups – if you can find one. Face to face victim meetings are far better than groups online, and safer too.
Be VERY careful about social media or online support forums such as Reddit because scammers hang out here too, looking for vulnerable people that they can hit again. What’s App is also a favorite hangout for recovery scammers, so be careful on What’s App, Discord, Telegram and other popular message/group apps.
## 16. How can I warn others about this scam?
Rexxfield reports almost all the cryptocurrency scams we come across to our investigative partners, Chainalysis (USD$8+ billion company used by law enforcement world-wide), which means the onchain evidence we find can be found by exchanges and law enforcement who also partner with Chainalysis.
What can you do?
- By all means share your experience on social media (without disclosing personal details) warning your friends and family.
- If asppropriate, report the scam to consumer protection websites like the Better Business Bureau.
- Report the numbers the scammer used (eg report the WhatsApp numbers)
## 17. Will this impact my retirement plans?
It depends on how much of you net wealth you’ve lost. Sadly, a very high percentage of our clients are people in or near retirement, often trying to make wise investments to boost their retirement; and end up losing almost everything. It’s heart breaking! So yes, significant losses late in life will impact retirement.
It seems crass and shallow, but monetary loss can have a silver lining. Consider:
- Getting some professional help to take stock of your financial situation.
- Reassess your financial and life priorities (perhaps with the help of a life coach or similar).
- Consider thinking outside your normal paradigm to consider a new path that costs less.
- Maybe going back to work is an option, or sharing living arrangements with family.
- Money is not everything – refocus on what is truly important to you.
- You can rebuild, so do not lose hope even when the future looks dark.
There’s no sugar coating that losing a high percentage of your net wealth is a devastating event to have happen, but monetary loss is a temporary problem. Be careful about what decisions you make in response.
“Don’t jump into a permanent solution to a temporary problem”. – Guy Snow
During what is a highly stressful time, do get some help to help you navigate through it and to get you back on a sound path.
## 18. Can I get psychological help to deal with the emotional impact?
Yes, psychological support is available and recommended:
- Seek counseling, or therapy to process feelings of anger, shame, or anxiety.
- Look for therapists specializing in financial trauma or fraud victimization.
- Consider support groups for fraud victims.
- Once you are back in a solid mental and emotional state, consider a life coach to help you plan your new future.
- Some victim support organizations offer free or low-cost counseling services.
## 19. How common are investment scams like the one I experienced?
Investment scams are very common and growing, as I mentioned in a previous question:
- Chainalysis has calculated that illicit transactions exceed USD$20b p.a.
- In September 2024, the FBI reported US citizens lost USD$5.6b in crypto currency fraud schemes in 2023, which is a 45% increase from 2022.
The problem is growing, and outstripping what traditional law enforcement can throw at the problem. However, changes are afoot. Wait and see what’s coming from the backers of Rexxfield, as it might have a sting in the tail on the depravity of investment scammers!
Following the blockchain trail
Partial image of a blockchain investigation
Image courtesy of Chainalysis.com
## 20. Are there any positive outcomes from experiencing an investment scam?
While it’s difficult to find positives in such a challenging situation, some potential positive outcomes include:
- Increased awareness and vigilance about financial fraud.
- Development of better financial literacy and research skills.
- Opportunity to educate others and prevent future victims.
- Personal growth through overcoming adversity.
- Stronger connections with supportive family and friends, and
By far the biggest positive impact we see is victims reprioritizing their life. Sometimes it takes great loss to realize the fleeting nature of money. Proverbs 23:5 from the Bible says “For wealth will surely grow wings, like an eagle flying off to the sky.” and people who have been scammed realize how true this is. That can mean they put less importance on chasing money for their source of happiness and security. It’s hard to feel secure about something that can fly off into the sky! Call this a “Come to Jesus moment”, but we have victims crying on the phone, genuinely soul-searching, and coming to a point where they realize they have been in love with money and not chasing what is ever-lasting and truly important.
“Our greatest fear should not be of failure but of succeeding at things in life that don’t really matter.” – Francis Chan
Money gives us options, but it’s not what real success is made from.
Further reading about post trauma growth:
Lastly, remember, while this FAQ provides general guidance, each investment scam case is unique. This is not personal financial or health advice of any kind. It is general, informative in nature and may not apply to your situation. Always consult with financial, legal, and mental health professionals for personalized advice tailored to your specific situation.
