Scams target people of all backgrounds. Scammers succeed because what they propose to you seems real, but usually, they are too good to be true. At SwissBorg, we want to educate our community not only about finance and wealth management but also about safety. Here are a few tips that should help you to avoid getting scammed.
When contacted by a person or a business institution over the phone, by email, or on a social platform, always consider the possibility that it may be a scam. Be sceptical and do not take offers at face value.
For our top tips on how to protect yourself from scams, as well as common red flags to avoid, check the end of the article.
Otherwise, here are some of the most common types of scams.
In some cases, a person might contact you over social media offering services as a financial advisor, professional trader or investment adviser. In these cases, the scammers often ask their target to download an app so they can easily exchange fiat currencies for cryptos and send funds back and forth.
Important: These scammers may recommend downloading a legitimate crypto exchange or wallet app. However, just because the app itself is legitimate does not mean the scammer is providing legitimate financial services.
Often these scammers will start by offering their target a free trial of their services, where they trade with their own money and offer the target some of their profits as a way of building trust.
One their target has downloaded the app, the scammer will ask the person to transfer small sums to the app, exchange the money for crypto and then send the crypto to the scammer. The scammer then claims they will use these funds for trading, and will start sending ‘profits’ to their target’s bank account, which will then need to be transferred to the app and converted into crypto to send back to the scammer for further trading.
In this case, the amounts grow larger over time and there are often many transfers going back and forth in the same day, which is designed to confuse the target, so they can’t keep track of what is their own money and what belongs to the scammer.
This is a case of if it sounds too good to be true, it probably is. If someone contacts you out of the blue offering up front profits as part of a free trial, and then aggressively pressures you take part in an investment or trading scheme, act with caution.
Hopefully, most of you would recognise this pretty quickly as something that’s too good to be true. The social media platforms of legitimate companies like Binance (below) are copied in an effort to acquire access to your personal information or wallet through impersonating the legitimate company. This can happen with a social media handle that is similar but slightly different than the official one.
Check out our video on how to spot scam pages on social networks: https://www.facebook.com/swissborg/videos/619504315185359/
At SwissBorg, we will never message you first by SMS or social media. We will also never ask you for sensitive information like your private keys, email address or telephone number.
Phishing is a type of scam that attempts to trick you into willingly giving over your personal information, which can then be used for malicious purposes.
One of the easiest scams to fall for is clicking on a link that you think will take you to a website (like an online wallet or exchange) but it instead takes you to a clone. The fake site will ask you for your login credentials, and/or other personal information, and will then be able to sign in to your account on the real site, potentially stealing any available cryptos.
So, when looking at a website be sure to check the URL and see that it has a lock symbol and that the website address is correct and does not have anything strange symbols or characters before the https part. If the HTTP does not have an S at the end, it means the site does not have a security certificate. This doesn’t mean the site is necessarily a scam, but you will know to be more careful.
Who has not received the classic email from some prince of Nigeria who really needs help in making an urgent bank transfer? Similar to the previous example many crypto scammers will send fake emails trying to acquire your personal details. They will often craft emails to look like they are coming from an official source, and ask for you to ‘confirm’ your details. So of course, once this happens, they have full access to whatever is in that account.
Here is an example of a legitimate email from SwissBorg - notice the correct URL in the sender address (@swissborg.com), as well as swissborg.com in the ‘signed by’ field.
A Ponzi scheme is a business model that relies on members earning money based on the investment of new members, rather than selling any actual products or services. The name originated with Charles Ponzi, who promised 50% returns on investments in only 90 days.
Two famous examples:
The bigger the schemes grow, the more unsustainable they become.
If you aren’t sure whether you have been made the target of a scammer, here are some common red flags to be aware of:
A financial professional who is in the position of providing investment advice, or carrying out investment activities on behalf of their clients, should not behave in this way.
Never share the recovery key for any app or crypto exchange you are using, and never send crypto to an untrusted wallet.
If you are not sure about the offer you’ve received, it is better to contact our support agents to check with them. You can contact us through the SwissBorg app or CryptoChallenge App or visit our Help Centre to make a request.