Thousands of sophisticated fake sites targeting investors in Europe

A huge euro logo stands in front of the headquarters of the European Central Bank (ECB) on April 9, 2009, in Frankfurt am Main, Germany.

Go big, or go home. It’s clearly the thinking of the bad actors who created thousands of fraudulent investment sites across Europe – and whose actions could portend things to come in the United States

Researchers recently uncovered a network of over 11,000 fake investment sites, aiming to lure fraud victims across Europe. Perhaps unsurprisingly, these sites often seemed more sophisticated and realistic than many previous fake sites, including “fabricated evidence of enrichment and faked celebrity endorsements to create an image of legitimacy and attract more victims.” ”, according to the Bleeping Computer report.

These fraudulent financial sites have targeted investor customers in the UK, Belgium, Germany, the Netherlands, Portugal, Poland, Norway, Sweden and the Czech Republic. However, US customers could be next, experts say.

Through these sites, European investors were tricked into investing their money in so-called “high yield investments”, for which they often had to deposit a minimum of $255 (or €250). Despite efforts to contain or tear down these false financial suitors, more than 5,000 of them fake investment sites were still active end of July, according to Group-IB. The research firm uncovered and mapped a large, thriving network of phishing sites and related content hosts.

Investment scammers have also effectively promoted their bogus sites through social media platforms, like Facebook and YouTube, where they can attract more potential victims and build credibility. Another trick: These sites cross distribution channels, often using mobile text messages and voice calls from supposed “customer agents” to make these financial offers more legitimate.

Going even further, after depositing their initial investment, these fake investment sites send out a “dashboard” that allegedly allows users to track their accounts, “thus extending[ing the] the illusion of a legitimate investment and trick victims into depositing more money for bigger profits,” Group-IB said. When investment victims try to withdraw their money from these fake accounts, the fraud is eventually exposed.

Can US investment firms prevent this type of impersonation and deception?

Jim Ducharme, executive at voyeur, the Massachusetts-based payment verification company that spun from RSA Security last summer pointed out that “banks are required by law to keep detailed records of work-related employee interactions to ensure that no fraudulent activity is taking place.

“Record keeping has always played an important role in keeping Wall Street accountable,” Ducharme added. “By relying on outside communication methods to discuss confidential transactions and operations, bankers and traders are compromising overall market security and investor protection.”

“This investigation marks a strong start in the crackdown on undercover messaging on Wall Street,” he added. “I think that might be the tip of the iceberg when it comes to uncovering fraudulent activity.”

In a recent email to its client, financial services firm Charles Schwab warned, “Stay alert to investment scams involving cryptocurrency. At Schwab, we are committed to helping you protect your assets. We achieve this in particular by raising awareness of the increase in fraudulent investment schemes (“scams”) involving cryptocurrencies and digital assets.

“While investing involves taking risks, getting scammed shouldn’t be part of it,” the email added.

5 red flags for investment scams

  • “Guaranteed” high returns, supposedly with little or no risk, that sound too good to be true.
  • Unauthorized or Unregistered Sellers. Use Investor.gov to check the background of anyone offering you a securities investment.
  • Skyrocketing account values. Investments that appear to be rapidly increasing in value are often fake.
  • False testimonials. Scammers often pay people to provide fake reviews, so never rely on testimonials alone to make an investment decision.
  • False contacts. Be careful if someone approaches you via social media with an investment opportunity. Pretending to be a friend or to have a mutual acquaintance is a common tactic used to gain trust.

Mary I. Bruner