As technology evolves, scammers are becoming increasingly astute in their ability to defraud unsuspecting victims. Therefore, it is more important than ever to be aware of the various techniques employed by scammers in order to stay one step ahead and protect yourself.
Cyprus Securities Exchange Commission (CySEC) released guidelines regarding not only some red flags to look out for but also steps that can be taken to mitigate the risk.
RED FLAGS THAT COULD INDICATE FRAUD
Fake emails / text messages and fake websites / ads
This is a phishing technique employed by scammers in order to collect personal information like financial or login credentials.
The scammer’s emails or texts usually contains a message designed to entice the receiver to
click on a link or open an attachment which contains a malicious code. The message may look legitimate and contain the receivers name and/or other personal information and even appear to be from a legitimate institution like a government body or even a CySEC officer or representative.
Accordingly, CySEC wishes to reiterate that they never send unsolicited correspondence, nor does it ever request any personal data, financial or otherwise. CySEC strongly advises verifying communication by contacting info@cysec.gov.cy.
It is prudent to be wary of any website or email which requests sensitive information, particularly when from an unknown sender or if it seems too good to be true. Phrases such as “guaranteed returns”, “once in a lifetime opportunity”, “hurry while the offer lasts” should always raise a red flag.
Phone Calls
Some phone calls seem legitimate as they will provide information about you or your account, however it is important to remain vigilant and verify the identity of the caller prior to providing any information.
Social engineering
This involves exploiting a person’s trust and feelings in order to obtain money or confidential information leading to a subsequent wrongdoing, such as giving away sensitive information or even investing large sums of money.
Social media is the preferred channel for social engineering, however it is not unusual for it to occur over the phone or even in person.
Social Media
Scammers may create fake accounts and potentially attempt to befriend individuals in an effort to gain access to their personal information.
CySEC emphasises the importance of being vigilant of friendly strangers on the internet and individuals offering investment opportunities and advice.
CySEC’s ten simple steps to protect yourself against scammers:
1. Always be wary of offers that seem too good to be true – ask questions and do not proceed with an investment or service which is not clear or has not been comprehensively explained.
2. Regard pressure to take immediate action, expiring offers, guaranteed or too high returns as red flags.
3. Verify the identity of the individual / entity contacting you – bad grammar and spelling mistakes are usually signs of impersonation.
4. Never give out personal information over the phone, through text, emails or online ads.
5. Do not take investment advice or opportunities offered by friendly online strangers and do not respond to requests for money.
6. Always verify the source before downloading or clicking on attachments to ensure they originate from a legitimate source.
7. Keep records and copies of all investment information, correspondence, and account details, in the event a complaint is submitted or the authorities are alerted, these will be needed.
8. Financial statements should be checked monthly in order to ensure no unauthorised changes to information, unexplained charges, ambiguous money transfers or missing financial products.
9. If fraudulent activity is suspected it is prudent that the relevant financial institution, the police, and the national regulator are contacted accordingly.
10. Always check the supervised entities registry of the National Regulator’s website to ensure the Investment Firm is authorised and legitimate before opening an account or making a deposit. Additionally, check frequently the announcements and warnings published by the National Regulator for any changes that affect the market and the financial institution you cooperate with.
For advice and assistance with matters relating to this information in this article, please contact our team of professionals.
Written by Andie Henderson - Legal and Compliance Associate | The Legal Opinions