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Ponzi schemes and investment scams – what to look out for so you don’t fall victim

Just pause to consider the following headline run in the venerable Financial Times in November 2020: “Investors lose £657 million to fraud.”

That’s just in the 12 months to September 2020, up 28% from the year before.

Even before the full impact of Covid-19 was felt on the global economy, CNBC reported that in 2019, authorities in the United States had uncovered 60 alleged Ponzi schemes. In total, this equated to $3.25 billion in investor funds.

Quoting from the Ponzitracker website, CNBC went on to say that this figure was more than double that recorded in 2018, and the highest since 2010. All eyes will now be on the complete 2020 figures as they emerge, given the implications of coronavirus for economies merged with the constant search for yield in a low-growth environment.

History, of course, tells us that Ponzi schemes and financial scams are nothing new. However, their sophistication in the online space and in a digitally connected world are tailor-made for casting a wider, global net that lures potential investors with promises of 20% or 30% returns – or, in one recent incident, interest of 7% a week.

A litany of warning bells

Schemes designed to part you and your hard-earned capital have a long and notorious history, perhaps most famously with Charles Ponzi’s original 1920s creation.

More recently, in South Africa, we saw the 2007 Fidentia investment scam which resulted in mastermind J Arthur Brown being sentenced to 15 years in prison for fraud in…

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Don’t listen to Kim Kardashian for investment advice – The Daily Free Press

The field of marketing has always benefited from the use of celebrity endorsements.

From Frank Sinatra’s appearance in Chesterfield cigarette ads in the 1950s to the more recent Terry Crews’ Old Spice commercials today, celebrity endorsements are a way for a brand to give credibility to its image or expand its outreach.

The problem arises when these celebrity endorsements are no longer for consumable products, but for financial products and investments.

Yvonne Tang / DFP Staff

In June of this year, Kim Kardashian posted a paid Instagram story endorsing the crypto token “Ethereum Max.”

She was paid an undisclosed amount, but based on previous reports on how much she charges, the amount for this post that she released to her more than 250 million Instagram followers was probably somewhere in the hundreds of thousands.

As a quick note, practically anyone could make a cryptocurrency token with the words “Bitcoin” or “Ethereum” in it because of a lack of copyright and policing. Legitimate projects that have done this include Bitcoin Cash, Ethereum Classic and others. Ethereum Max, the token Kim K was paid to promote, like the ones just mentioned, has no affiliation whatsoever with Ethereum.

It was later revealed that the so-called Ethereum Max developers, of whom the public had no knowledge of whatsoever, most likely were creating a “pump and dump” scheme. In this scheme, prices of a financial product are boosted with fake recommendations…

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Scam drams! Whisky is soaring in value but fraudsters are cashing in

As one of the world’s best-loved alcoholic drinks, whisky has a habit of appreciating in value.

According to one measure, rare and vintage whiskies have risen in value by more than 500 per cent in a decade.

Export markets are also booming, with the Scotch Whisky Association estimating that 36 bottles of the spirit are exported every second.

Liquid asset: Rare and vintage whiskies have risen in value by more than 500% in a decade

Thousands of Britons collect and sell rare whiskies, yet Money Mail has spoken to experts who fear unscrupulous firms are using the buzz around the spirit to push low-quality investment opportunities on unsuspecting savers.

In recent years, there have been stories of collectors making significant profits from selling whiskies they purchased years earlier. 

The specialist nature of collectors’ markets makes them great for those who know what they’re doing. But they’re also perfect for scammers.

In 2016, the Financial Conduct Authority (FCA) warned about a rise of fine wine scams — where savers were duped into buying overpriced or non-existent wine.

How to spot a con 

Most experts agree that one of the favoured tactics of scammers is the use of high-pressure phone calls.

By putting potential victims under pressure to make a decision, scammers increase their chances of making a sale. 

Of the whisky websites advertised on Google, several offered a free investment guide — in exchange for your contact details.

After putting my details into three…

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ABA launches new awareness campaign as scams grow

As more Australians experience financial scams, the Australian Banking Association (ABA) has launched a new campaign to raise awareness on the increasing threat of scams, warning Australians to be on the lookout for scam phone calls, texts and emails.

Last year in Australia $851 million was lost to scams. In the year to July, 84,000 scam calls were reported to Scam Watch, which is an increase of 145 per cent on the same period from the previous year (34,000).

The ABA campaign has been launched off the back of new data from the ABA, which reveals 37 per cent of Australians have lost money, or know a close friend or family member who has lost money to a scam.

Incredibly, 34 per cent of Australians know someone who have lost more than $150,000.

“Scammers don’t target one group over another, they target all people of all backgrounds, ages and income levels across Australia.”

ABA CEO Anna Bligh

Anna Bligh, Chief Executive Officer at the ABA, said with all the positives from the pivot to digital during COVID-19, one negative has been the rapid increase in sophisticated scams.

“Scammers don’t target one group over another, they target all people of all backgrounds, ages and income levels across Australia. Scams succeed because they look like the real thing and catch you off guard when you are not expecting it,” Ms Bligh said.

66% of Australians fend off a scam every week

“This campaign is about assisting Australians to help make them aware of scammer tactics, so they can…

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Cryptocurrency latest news – Bitcoin price down today on Coinbase as Suex exchange sanctioned for ‘assisting in heists’

BITCOIN continues to be down today on Coinbase as Suex exchanged is sanctioned for “assisting in heists.”

The US Treasury announced that it would sanction the cryptocurrency exchange for its “alleged role in laundering ransoms for cyberattacks” according to CNBC.

Yesterday, Bitcoin dropped below $44,000 today as the entire market cap drops more than 8percent in one day.

The crypto dropped 10 percent to under $43,000 on Monday morning.

It was recently up to $48,638.99 after it rose 8.66 percent over the past week.

The tumble comes as Shiba Inu coin has spiked up in value after being added to Coinbase, as its rival DogeCoin dropped.

Meanwhile, the “meme” Dogecoin has gone down 5.8 percent over the last week.

Read our cryptocurrency live blog for the latest news and updates…

  • EXPERTS DIFFER PREDICTING SHIBA INU’S VALUE

    Plenty of cryptocurrency fans have predicted Shiba Inu’s value for 2022, but you should take it with a pinch of salt as it’s nowhere near guaranteed.

    For example, crypto website Wallet Investor expects a value of up to $0.000018 in a year’s time.

    Meanwhile, Coin Price Forecast expects it to hit a value of $0.00002336 by the middle of next year.

    It then expects it to end the year at a slightly higher level of $0.00003037.

  • CAN YOU TRADE CRYPTO ON ROBINHOOD?

    Unlike most of its discount rivals, Robinhood offers 24/7 crypto trading through its platform.

    That means you’ll have access to trade major cryptocurrencies including, DogecoinEthereum,…

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Yuji Naka calls ‘Sonic The Hedgehog’ selling for $430,000 a “scam”

Almost a month after an investigation alleged that video game auctions may be underpinned by fraud, former Sonic Team boss Yuji Naka thinks the sale of a Sonic game is a scam

Via Eurogamer, and quoting a tweet from Goldin Auctions, where the original Sonic The Hedgehog sold for $430,500 (roughly £315,175), Naka wrote “what’s this? Is it a scam? That’s a scam right? I wondered if it was time for Sonic to reach a high,” and he added that he “saw the news that Mario was sold at a high price recently, so I thought Sonic was also a high price, but it’s different. I’m sorry.”

Digital Foundry video producer John Linneman responded to a comment under Naka’s post saying “it wouldn’t normally drive the price up this high, though, since this is part of the Wata scam.”

The Goldin Auctions website says the minimum bid price was $75,000 and that overall 21 bids were placed for the 9.4 graded title, with a seal rating of A by Wata Games.

Wata Games came under fire recently as Australian journalist Karl Jobst released a YouTube video claiming that the grading company was engaging in fraud to drive game prices up at auction.

Jobst alleged that CEO of Wata Deniz Kahn corroborated with co-founder of Heritage Jim Halperin to position vintage games more like investments than collectables, by claiming their value would continue to…

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Why The Financial Services Sector Need To Invest in Voice Assistants

The use of voice assistants in the financial services sector will take ease, convenience, and personalization to a whole new level by providing customers accurate information in a secure manner.

‘Hey Siri’, ‘Ok Google’, ‘Hey Alexa’ — these are phrases we’ve gotten used to hearing more and more of every day. That’s because voice assistants are everywhere. They have become an important part of smart devices, and its adoption and usage are growing rapidly. In the USA alone, about 46 percent of individuals use voice assistants for some task or the other. And the increasing use of voice assistants is justified as they have highly eased interactions with smart devices to gather information or to get a task done. Financial institutions can capitalize on the technology to improve their services, increase user engagement, and ultimately increase revenue. But first, let’s have a look at what raised the need for using voice assistants in finance.

Voice Assistants Provide Convenience and Personalization in Finance

The banking, financial services, and insurance(BFSI) sector is faced with regulatory issues, demand for convenient and personalized services, and high competition. Of these, providing customers convenient, personalized, and secure experiences has gained importance in recent years. As individuals have access to technologies at their fingertips, their usage has increased significantly. And the expectation of services that can be availed through these…

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TOWIE star Lewis Bloor, 31, used a fake name and pressured elderly victims in £3m scam, court hears

The Only Way Is Essex star Lewis Bloor used a fake name to con people in a £3million diamond scam, a court has heard.

Bloor, 31, who joined the cast of the ITV2 reality show for three years from 2013, allegedly posed as ‘Thomas Harkin’ to dupe investors into buying the coloured stones at a 600% mark-up.

He denies conspiracy to defraud between May 7 2013 and July 1 2014 at Southwark Crown Court where he is on trial alongside Joseph Jordan, 29, from Waltham Cross, Hertfordshire, George Walters, 29, from Beckenham, in Kent, Max Potter, of Enfield, Middlesex, Nathan Wilson, 28, of Brentwood, Essex, and Simon Akbari, 27, from Loughton, Essex, who also deny the charge. 

Around 200 people, many of whom were elderly, were allegedly fleeced of more than £3million by fraudsters working for two firms, Imperial Assets Solutions (IAS) and Henderson & Forbes. 

Lewis Bloor (pictured), 31, who joined the cast of the ITV2 reality show The Only Way Is Essex for three years from 2013, denies conspiracy to defraud between May 7 2013 and July 1 2014 at Southwark Crown Court

Bloor joined the cast of Towie for its tenth series in 2013 and spent three years on the show where he shared romances with co-stars Chloe Lewis and Kate Wright.

He left to appear in Celebrity Big Brother in 2016 and got together with Marnie Simpson while in the house.

Southwark Crown Court heard on Tuesday that Bloor was paid £150,000, with some of the money paid on to others, by IAS, before leaving to pursue…

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Investment scammers run riot on search engines – Which? News

Search engines such as Google and Microsoft’s Bing provide an easy hunting ground for criminals who target victims via paid-for adverts, while the spike in investment scams is pushing regulators and law enforcement to the limit, warns Which?. 

Action Fraud received more than 17,000 investment scam reports in the year to September 2020, up 28% on the previous year, with total losses reaching £657m – and many more cases go unreported.

The financial uncertainty created by the pandemic has played into scammers’ hands: the Financial Conduct Authority’s (FCA) warning list of firms potentially running investment scams doubled from 573 in 2019 to 1,184 in 2020 – yet three in 10 investors surveyed by Which? had never even heard of it.

Many firms on the warning list initially advertised on either Google or Bing, having paid to appear at the top of search results for terms such as ‘best bonds’ and ‘best fixed-rate bonds’. We’ve found that such adverts have remained for weeks after the FCA issued warnings to avoid them.

  • Stay one step ahead of some of the latest scam threats by signing up for our free scam alert service.

Rogue comparison sites

A Which? survey of 206 investment scam victims found that while one in seven were targeted by phone, four in 10 were targeted via online methods.

Online methods included via email (12%), search engines (10%), adverts on Facebook (9%) or other non-social media/search engine online adverts (8%).

Although…

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Barbados Co. Says $12M COVID Vaccine Deal Was A Scam

By Carolina Bolado (September 20, 2021, 10:18 PM EDT) — A Barbados company tasked by the island nation’s government with procuring COVID-19 vaccines says it was scammed out of millions of dollars by a Florida company that fraudulently promised to deliver 1 million doses of the AstraZeneca vaccine that did not exist.

In a suit filed Friday in the Southern District of Florida, Radical Investments Ltd. says it signed a $12.2 million deal with Good Vibrations Entertainment LLC based on Good Vibrations CEO Alex Moore’s representations earlier this year that he could source and deliver enough AstraZeneca vaccines to vaccinate the nearly 300,000 citizens of Barbados.

But, as Radical Investments learned…

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