Guelph, Ont., police are seeing an increase in cryptocurrency investment scams and trying to warn the community about some of the ways people are losing money.
In a news release on Monday, the service said this is not a localized scam and that other major cities have been hit as well.
Police said there have been reports of victims being contacted through social media platforms where the suspect will convince them to make investments in cryptocurrency through online transactions.
“The suspect is very well versed and knowledgeable in cryptocurrency and makes promises of large returns on investments,” police said.
“Though cryptocurrency can be a means of legitimate investing, fraudsters have capitalized on the inexperience of the public and are utilizing several fraudulent online platforms to appear legitimate to the unsuspecting victim.”
The service said fraudsters are directing victims to a website that appears legitimate, and once logged in with a username and password, victims watch their investment grow at an astonishing rate. Police said this leads the victim to want to invest more, making their loss that much more substantial.
“Once the victim tries to withdraw the funds or use their ‘earnings’ to make further investments, they are told that they cannot and that they are locked in unless they make an additional substantial investment of their own funds,” police said.
“It is at this time that the fraudster will either cease communication with the victim or will try to delay them in making withdrawals by telling them that they agreed to the terms of the investment and that if they don’t invest further they will lose everything that they have already invested.”
Once the money is transferred into the account it is immediately transferred out or used to make further transactions that are then accessed and transferred around the globe, police.
Guelph police’s fraud unit has provided a list of warning signs of a scam.
- Brokers use non-traditional means to contact you, such as the WhatsApp texting app, Facebook, etc.
- The website they direct you to only has email or a site-based chat as a means of contacting them
- The investor contacts you by using a variety of email addresses and phone numbers
- The text messages and reports contain grammar or spelling mistakes
- Their introduction will be inaccurate. For example, referring to you by your first name, i.e. Mr. John instead of Mr. Smith
- The promise of large returns on your investment (150-200 per cent returns per investment). If it sounds too be good to be true, it probably is
- The scammer may use a romantic angle to gain your trust
- They may allow you access to their own username on the fraudulent site then direct you on how to invest and show you just how much money you could be earning
- There may be translations from other languages within the email
- Be very leery of people contacting you on social media who, within a short period of time ask you to invest with them or begin discussing how much money they are earning with their investments and how you too could make a lot of money if you follow their directions.
Police are urging residents to always do their research on the people they are going to invest with.
“Generally, there aren’t too many curtains you have to look behind before you are able to see that fraudulent company is not legitimate,” police said.