Social media platforms are plagued by scammers who make enticing promises of guaranteed investment returns. Last year, consumers lost billions of dollars to these scams, and one such victim was Troy Gochenour, a 50-year-old resident of Columbus, Ohio. Gochenour fell prey to a crypto-mining scam initiated through a WhatsApp message from an attractive stranger.
Having recently relocated and seeking companionship, Gochenour turned to online dating. During this time, he received a WhatsApp message that began with the words, “Sorry to bother you.” This message marked the beginning of a series of interactions that eventually led him into a cryptocurrency scam.
Financial scams, including those involving cryptocurrencies, amounted to $3.8 billion in losses for U.S. consumers last year, twice the amount recorded in 2021, as reported by the Federal Trade Commission (FTC). The surge in these scams can be attributed to factors such as the internet’s speed and convenience, the proliferation of online payment platforms and apps, and the dissemination of misleading financial information. The isolation and loneliness brought about by the pandemic have also contributed to the vulnerability of individuals to such scams.
In Gochenour’s case, he engaged in weeks of communication with someone who appeared romantically interested before the topic of “liquidity mining” was broached. Despite initially being skeptical about cryptocurrencies, he eventually decided to heed the advice and instructions of his correspondent. Scammers have honed their skills in creating websites that convincingly mimic legitimate cryptocurrency companies, leading Gochenour to believe he was making real progress. After setting up a cryptocurrency wallet, he witnessed his transferred funds seemingly grow in accordance with the scammer’s promises.
Gochenour confessed, “I became emotionally invested in this person. Initially, everything seemed to be going well. She enticed me with the prospect of us being together and making substantial profits.”
A man named Gochenour fell victim to an investment scam. He transferred $5,000 to a wallet and later found his money gone. He was directed to a website with a “contract” by the scammer. He was told to contact “customer service” and was asked to invest an additional $10,000 to recover his funds. Despite losing money each time, he continued adding funds until it appeared he had $200,000. When told he needed to pay $35,000 in taxes upfront, he realized it was a scam. By then, he had taken out loans and owed $55,000 in student debt. He now helps investigate such scams.
To avoid falling for investment scams, watch for signs like quick, easy, low-risk promises, often related to real estate, cryptocurrency, or financial coaching. Be cautious of “proven” and “guaranteed” claims with paid testimonials. Look out for time pressure and high-pressure pitches that require more money. Research offers online, consult friends or advisers, reject unsolicited offers, and take your time. Scammers exaggerate events and tie pitches to news. Be cautious if a scammer asks for money in advance, especially for crypto investments.
“Never mix online dating and investment advice,” warns the FTC.
The agency advises against mixing online dating with investment advice, as scammers might use dating platforms to promote crypto investment scams. Many unreported losses occur due to embarrassment, but reporting to BBB, CFPB, FTC, and Internet Crime Complaint Center is encouraged. Other common investment frauds include deceptive investment coaching, where costly upfront fees promise a “proven” strategy for stocks or real estate, often resulting in empty promises. Similarly, scammers lure victims with promises of risk-free real estate training, using over-the-top claims. Be cautious of “metal dealers” urging immediate precious metal investments, as they may just take your money. It’s advisable to read the FTC’s precious metals fraud alert before investing in these areas.