How to avoid cyber-enabled investment scams

Criminals use advanced technology tactics to defraud you of money and data. These tips can help protect you and your family.

 

While anyone who socializes, conducts business or communicates digitally can become the target of cybercriminals, investors are now the number one target for internet crime.

 

In 2024, the losses reported due to Investment scams were the highest of any crime type tracked by the FBI Internet Crime Center, IC3. Investment fraud losses rose from $4.57 billion in 2023 to $6.57 billion, a 44% increase. Within these numbers, investment fraud with a reference to cryptocurrency rose from $3.96 billion in 2023 to $9.32 billion in 2024, an increase of 135%.1

 

The increase in cyber investment scams reflects the trend of more people of all ages and backgrounds investing via the internet, which may make them more susceptible to fraudulent investment schemes. However, this activity is not necessarily too risky to undertake; if you know what to look out for, there are ways to protect yourself and your assets. Here’s what you need to know.

 

What are cyber-enabled investment scams?

OOnline investment scams are schemes to defraud people by convincing them to buy stocks, bonds, commodities, real estate or cryptocurrencies. The pitch, which usually comes via an unknown sender’s text message or direct messages on social media, typically raises the prospect of significant returns with minimal risk. The reality is often that there are no returns at all — and losses include your outlay to purchase the once-in-a lifetime opportunity.

 

Many scams rely on social engineering tactics that can be very convincing. By leveraging freely available data collected from social media sites, scammers can contact targets via messaging platforms, build trust by knowing just enough about them, and promise a low-risk, lucrative opportunities. In one recent widespread scheme, reported by FINRA, malicious actors advertised “stock investment groups” via social media and then lured individuals to group chats using encrypted messaging applications where they pitched investment opportunities. Other scammers may link their profiles to public figures or organizations to create an illusion of legitimacy.

A graphic comparing monetary losses due to different types of cyber crime from 2024 and 2018. See link below for a full description.

New technologies, new risks

Cybercriminals are embracing new technologies to create believable fraud campaigns. Many are incorporating artificial intelligence (AI) tools into their social engineering tactics to craft realistic messages and images and create convincing fake emails, spoofed websites and applications.

 

Search engines, chat clients and learning systems have become go-to social engineering tools cybercriminals use to build relationships and trust with potential targets. Many criminals are automating social engineering to more efficiently gather sensitive information about potential targets. As with many other scams, generative AI tools can help bad actors, who may create fake video and audio communications and documents that make social engineering tactics even more convincing and harder to detect.

 

While cybercriminals typically rely on deception to perpetrate cyber-enabled investment scams, understanding the risks and using basic cybersecurity hygiene can help you detect their methods.

 

Visit www.bankofamerica.com/security to learn how to help protect yourself and those closest to you.

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1FBI Internet Crime Complaint Center, “FBI Internet Crime Report 2023,” March 2024.

 

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