Beware of Money-Flipping Cons and Investment Scams

Thursday, October 3rd, 2024 -- 9:00 AM

Money-flipping cons and investment scams have been on the rise for years.

Since 2020, BBB has received more than 4,000 reports from consumers about investment scams, many of which involved cryptocurrency. Traditionally, these scams have taken the form of long-term romance scams to slowly gain the trust of their targets.

More recently, however, these scams have taken to social media platforms, where scammers can more quickly target a larger audience and steal your money and personal information. BBB Scam Tracker frequently receives reports of cryptocurrency scammers on TikTok.

Here’s what you need to know. How the scam works: You’re scrolling through TikTok when you receive a direct message from a user asking if you’re interested in investing. The user’s profile seems legitimate, and the company’s website looks real.

You may also encounter a user sharing videos of piles of cash, saying you can earn that much money through cryptocurrency investments, too. You decide to engage with the user, and they present you with a great cryptocurrency investment opportunity.

For an initial investment of a few hundred dollars, your money could double or triple in just a few days! You say yes and start the investment process. At this point, the user will ask you to communicate off social media on a different messaging app.

You’ll be asked to send money through a digital wallet service and potentially purchase cryptocurrency and send it to them. Then, they will “invest” the money for you, which allegedly starts multiplying immediately. When you try to get your money back, the scammer will claim you must pay service fees.

At first, these amounts may seem harmless and are just a few hundred dollars. However, if you pay one fee, the scammer will likely continue to ask for more, always promising you will get much more back than you spend.

Unfortunately, these fees are fake, and any money you send will end up in the scammer’s pockets. You won’t be getting a return on your investment, and you won’t be getting your initial deposit back either. 

How to avoid social media cryptocurrency scams: Use good judgment. Get-rich-quick schemes and investments guaranteed to give you a huge return are nearly always scams. If an offer sounds too good to be true, it probably is.

Do your research. Before you contact someone through TikTok or another social media platform, look up their name, phone number, and company name (if they have one) online and on BBB.org.

The investment industry is highly regulated, so be wary if investments are unregistered with the SEC or other investment industry regulators. You can also search on BBB Scam Tracker for scam reports. You’ll likely find complaints online about it if they have conned others.

Don’t give into scare tactics. If an “investor” contacts you, they may try to convince you the investment will only work if you act right now. Or, if you’ve already sent them funds, they may threaten you with legal action if you don’t pay their fees. In any case, don’t give in to scare tactics. Recognize them as the hallmarks of a scam.

Understand how digital wallet services work. Treat any money you send through a digital wallet service like cash. Once you send the money, there will be little you can do to get it back if you were scammed. Only use these apps with people you know and trust.

Find a trusted financial advisor to help you. If you are interested in investing, look for BBB Accredited financial consultants to help you. Working with a vetted and reliable business can help you avoid investment scams online. Read BBB’s tips on how to find someone to help you manage your finances.

Learn more by reading BBB’s investigation on investment scams. Read up on more investment scam techniques and money-flipping scams. If you spot a scam on TikTok or elsewhere, report it to BBB Scam Tracker, even if you didn’t lose any money.

Your report helps boost consumer awareness about the issue. Check out more crypto tips and financial wellness advice on BBB.org.

Feel free to contact us with questions and/or comments.