Scamming will not come to an end on New Year’s Day. Although many such frauds, such as the infamous binary options scams, are being tightly watched, variations, will continue and be joined by brand new ones. As scammers are now more sophisticated more cunning and more technologically advanced, the public needs to be increasingly alert and attentive.
Let’s consider some investment trends that we should be on the lookout for in the coming year.
From Binary Options Scams to Cryptocurrency Scams
Binary options are notoriously problematic financial trading instruments. Many traders are drawn to binary options because of its simplicity, but as they are highly speculative, many regulated exchanges are careful to keep their distance. Thus, most binary options trading is conducted on unregulated trading platforms. And this resulted in an online explosion of fake brokerages.
As the appeal of binary options dwindles and as the ban (imposed by pan European financial regulator ESMA) on providing binary options trading products in the EU continues through to January 1, 2019, another financial fad has gained momentum; cryptocurrencies. Since cryptocurrencies remain decentralized, creating regulations for this industry has become a pressing issue for authorities around the globe. Many crypto traders complain of price manipulations and funds stuck on exchanges. Threads on the internet are filled with new grievances on a daily basis.
Given this, regulatory rules on the cryptocurrency have become essential. But an absolute ban would have a negative impact on the economy because of the participation of institutions and retail investors.
Co-founder of ThatSucks.com, Martin Kay, reported: “Bitcoin is a dream come true for ex-binary options scammers; not only they continue to make hollow promises of getting rich quickly, now they take your money and process it through crypto wallets which could never re-trace.”
Real Estate Scams are on the Rise
Meanwhile, according to the FBI and other law enforcement authorities, real estate scams are becoming more prevalent. Cybercrimes have become so widespread that the FBI has established an Internet Crime Complaint Center (IC3). Its website states that “from calendar year 2015 to calendar year 2017, there was over an 1,100% rise in the number of BEC/EAC [business email compromise/ email account compromise] victims reporting the real estate transaction angle and an almost 2,200% rise in the reported monetary loss.” According to the IC3, in 2017, there were as many as 9,645 victims of real estate fraud.
Generally speaking, a scammer will hack into the email account of a real estate patron and observe it. When the scammer identifies email correspondence between the real estate agent and the buyer, they send the buyer a fake email that appears to have been sent by the real estate agent. That email requests that money for the real estate purchase is wired to a different account (belonging to the scammer). At times, scammers are also able to hack into the email account of a real estate professional, if security measures are lacking.
Dale Dabbas, CEO and president of EZShield, a firm that deals with identity protection stated: “These transactions involve a lot of money and a lot of personally identifiable information exchanged . . . And that’s worth a lot of money to a scammer.”
Timeshare Scams Continue and the Sanctuary Belize Scam
Consumers continue to report receiving offers to buy into various vacation accommodation opportunities, including discount holiday clubs, timeshare and holiday ownership deals. Britain’s highly regarded Chartered Trading Standards Institute (CTSI), among other organizations, warns consumers about attending presentations where they may be pressured into purchasing such deals. Also, consumers should know that timeshare offers involve continuous ongoing payments that can increase over time.
One particular real-estate scam that has made headlines is the “Sanctuary Belize” scam. The U.S. Federal Trade Commission (FTC) shutdown this scam, noting that it robbed consumers of more than $100 million. “Sanctuary Belize” enticed Americans with the assurance of retirement in a Caribbean paradise. The reality was a sham luxury development.
Many small-business owners, close to retirement age, invested their retirement savings in this scam. They were convinced to buy plots of land that cost between $100,000 to $500,000. Promotional offers assured a “no-debt” business plan, prompt construction and a good financial return. Over 1,000 lots were sold, however, only 10 percent have finished homes and amenities. The promised hospital, airport and golf course will never be built. Many buyers lost all their investment or were required to sell their properties back to the scammers and forfeit their money.