Investment fraud: The LKA Schleswig-Holstein warns against rip-offs due to high profit prospects when investing on dubious online trading platforms.

Investment fraud through dangerous stock market games is becoming increasingly popular.

“This type of fraud is another perfidious way of defrauding people of their assets. This is linked to the bond of trust with the later victim, similar to the grandchild trick or calls from fake police officers.

explains Volker Willert, head of the economic, corruption and environmental crime department in the Schleswig-Holstein State Criminal Police Office.

“The customer can view their account movements and alleged profits online at any time and see that their own investment decision is correct. This makes it easier to invest larger sums of money. In the end, however, there is usually a total loss.”

But how exactly does investment fraud work?

When looking for lucrative investment opportunities on the Internet in times of low interest rates, those interested are increasingly coming across very professional and appealing online portals that appear reputable. Such sites are also advertised on social media platforms or shared as supposed insider tips.

Once the interested party has registered on the trading platform and invested for the first time, an employee will contact you immediately. This supposedly competent financial broker tries to build trust as a “personal advisor” and persuade the investor to make increasingly larger investments from initially financially manageable investments. The decision is always left to the customer. However, pressure arises from offers that are supposedly limited in time. For weeks and months, the unsuspecting investor is led to believe that he has invested successfully.

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The “personal advisor” promises quick profits with financial contracts for difference, so-called CFDs (Contracts for Difference), or binary options on stocks, currencies, raw materials or even cryptocurrencies, which usually involve speculation on rising or falling prices. However, he does not explain exactly how these investments work.

The deposited funds are never invested and the entire trading platform and customer account are fake. The invested capital is usually irretrievably lost. Losses of up to EUR 50,000 are not uncommon.

When the investor wants to have his balance paid out, he slowly becomes aware that he has been a victim of fraud. Either contact with the trading platform is no longer possible or the alleged advisor cannot be reached. However, they often fake the crash of the investment and take full advantage of investors' fear of total loss. The investor now feels dependent on the alleged advisor, who encourages him to make further payments to save the capital or subsequently to take out alleged loss insurance. Surprisingly, money transfers are also promised if bank, legal or notary fees have been transferred beforehand. But this money is then lost too.

With this lucrative scam, millions of dollars can be stolen. The network of trading platforms and operating companies with offshore addresses and foreign accounts to which the victims' money is moved stretches around the globe and is difficult to understand.

Cooperation with Europol

As part of investigations in collaboration with Europol, it was determined that the perpetrators from Southeast Europe and Israel were pulling the strings in the investment fraud. The number of reported cases in Schleswig-Holstein is currently several hundred. In most cases, the injured parties escaped with the loss of smaller sums of around EUR 250, although large amounts of damage are not uncommon. In one case, a 76-year-old in the Herzogtum-Lauenburg district was cheated out of EUR 455,000. The dark field is likely to be very large. Many people do not dare to report the crime because they are ashamed. The police still advise reporting any crime.

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The Federal Financial Supervisory Authority (BaFin) points out the high risk of loss with CFDs and binary options. For over a year, financial service providers and credit institutions have been prohibited from marketing, distributing and selling binary options and CDFs to private customers. But how can you identify dubious trading platforms?

“You should always be suspicious of offers that promise safe investments, guaranteed returns and high profits with very low risk,”

warns Volker Willert.

be queried in BaFin's entrepreneur database at www.bafin.de The companies that BaFin has already banned from doing business are also listed here. There is also independent advice from consumer advice centers, and information about providers and products can often be found on the Internet.

You might also be interested in: Bitcoin spam with “Google code” on Facebook

Source: LKA Schleswig-Holstein
Article image: Shutterstock / By ImageFlow


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