Cyber investment fraud Promises of dream returns? Beware!

“Invest today and secure a 20 percent return ...” was the sort of line fraudsters used to print up on high-gloss pamphlets. Today, they save on these costs and invest the money in their digital presence instead, because potential victims are now surfing online. As ever, it is still the prospect of easy money that entices.

Crooks use a wealth of tricks to fool people into thinking an easy profit can be made. An example: Ms. Meier searches the internet for investment tips and cryptocurrencies. She ends up on what appears to be a trading platform. The cybercriminals have optimized this website so that search engines place it at the top of the search results. To view the “real-time performance” information, Ms. Meier must provide her phone number and email address.

Just one day later, she receives an email from the platform, which at first glance appears professional and trustworthy. A short time later, a gentleman calls her who claims to work there as an investment advisor. He seems understanding, friendly and competent. “Social engineering” is the name given to this type of scam. “Our trading system is currently generating dream returns,” he claims, throwing in some impressive-sounding technical terms for good measure.

Ms. Meier takes the bait, but only transfers CHF 300. She opens a crypto account with the help of the alleged professional, whom she has never actually met. And lo and behold, the amount doubles in just a few hours, at least on this dubious website. Encouraged by this apparent profit, Ms. Meier now transfers CHF 20,000. The following week, her “advisor” congratulates her on her success and recommends "seizing the opportunity to benefit from current price increases.” A short while later, Ms. Meier invests a further CHF 5,000. In reality, all of the money has landed directly on the fraudsters’ crypto account.

When does the rude awakening come? “At the latest when you want to withdraw the money,” explains Marcel Drescher. With Ms. Meier, the situation was as follows: After her investment multiplied in value online, she wants to realize her apparent profits – just as she is used to doing with her stock market investments. But despite multiple attempts she is unable to convert her crypto account into money. She tries to get in touch with the advisor, but to no avail. Countless emails and unsuccessful phone calls later, he fobs her off with an excuse that he is on a business trip. When Ms. Meier does not let up, the self-proclaimed expert warns that it would be risky to sell her investment because of “the high volatility and low trading volume.” Now would be a good opportunity to buy rather than sell.

For months, Mrs. Meier is stalled with excuses until she insists on an immediate payout. The fraudster agrees, but disappears for weeks and then spins a yarn about “blocked cryptocurrencies.” Mrs. Meier is now suspicious and starts to panic. Clearly annoyed, the impostor claims that he pointed out right at the start that an “investment insurance policy” was advisable. In order to rescue the capital, some legal fees must now be paid. However, this is just another attempt to steal more money from Mrs. Meier.

Investment scammers know a lot of different tricks – and can drag things out for years. Sometimes the story begins with an online advertisement that unlawfully features celebrities, but which appears on well-known news sites. Or you may be contacted directly via email or text message. “Sometimes they even pay out small amounts, to gain your trust,” warns Drescher.

In all events, the capital is effectively gone. The victims have willingly transferred the money to make an investment. While the victims of investment fraud are blinded by the prospect of dazzling returns, in the case of phishing – another common type of fraud in the financial sector – they fall for another perfidious form of deception. Professional-looking emails (phishing) or text messages (smishing) appear to originate from trustworthy providers and request payment for a parcel delivery or a streaming offer, for example.

The good news: “Even if someone falls victim to a scam, the fraud can usually still be prevented,” emphasizes Drescher. Because of the 3-D Secure security standard, banks use an additional procedure to check whether the person making a credit card payment is really the authorized person. At UBS, for example, a fraudulent transaction can be rejected in the UBS Access App. If, in the heat of the moment, you were duped by a phishing attempt, you can check whether the alleged additional payment of a parcel delivery fee (example: CHF 2.95) agrees with the amount in the UBS Access App (example: CHF 295) – and stop the transfer if this is not the case.

The more Apple Pay, Google Pay and Samsung Pay are used, the more frequently phishing gangs try to use the stolen data to quickly activate mobile payment solutions (wallets) on their smartphone. UBS runs a check via an additional process: clients have to confirm the activation in the UBS Access App. Following confirmation in the app, the credit card holders are notified via text message of the activation “on a new device.”

If it was not approved for your own wallet, the credit card should be blocked immediately. Anyone who voluntarily shares their personal data via the link from the phishing email and confirms it in the UBS Access App is neglecting their duty of care. The payments cannot be reversed.

Behind the majority of the scams are highly professional, technologically skilled organizations from abroad, mostly from Asia and Eastern Europe. They work together with criminals in Switzerland who “look after the local clientele” and sometimes speak genuine Swiss dialect.

What is the best protection against investment fraud? Marcel Drescher emphasizes the importance of common sense: “If something sounds too good to be true, it probably is not true.” However, if someone does fall victim to fraud, they should contact their bank immediately and notify the police. Not only will this help limit the losses, it will also improve security in the future because every report provides valuable information that helps track down the fraudsters and enables the systems of protection to be expanded in relevant ways.