What you need to know about fraud attempts and how to protect yourself

Fraud has existed since the dawn of time. But with habits evolving – and especially the surge in time spent online, the advent of social media and online-shopping, and the ubiquitous use of smartphones – it has taken new forms.

You have probably heard of, or even experienced, attempted ‘phishing’ – a deceitful attempt to contact you by pretending to be a trusted company and to get you to hand over personal information or money. Other examples are the (fake) SMS from the post office asking you to pay a small customs fee to complete an apparent delivery, or the (also fake) email from your bank containing a link to confirm your e-banking access.

The principle is always the same: to trick you into trusting them and doing something you would not otherwise have done, had you known the truth about them and their real intentions.

Have the right reactions

While there are many threats, it is possible – using good practices – to protect yourself against them and avoid a number of problems.

• Pay attention and don't succumb to pressure. Fraudsters take advantage of your distraction, playing on a sense of stress and urgency. There is no need to rush. Instead, take your time to assess a potential threat. Indeed, it can be risky to click on the link in a suspicious e-mail too quickly or to confirm an online transaction you didn’t personally make.
• Assume you never give out your confidential data - let alone by telephone, SMS, e-mail, or on a non-secure website. Remember: the vast majority of serious organisations do not make such requests through these channels.
• If in doubt, contact the organisation through another channel to ask if it has indeed sent the message. If you are still in doubt, do not continue, and delete the message.

The case of investment fraud

Investment fraud is a process through which you are offered the opportunity to invest in highly profitable, safe, and rapid-return investments. It is, however, all fake.

The typical scenario of an investment fraud attempt

• The bait is the promise of easy, profitable, guaranteed, tax-free money. Such advertisements or solicitations are particularly common on social media. E-mail solicitation, however, is also very common.
• Quick contact and advice... from a fake advisor. The human voice aims to build confidence and get beyond the registration stage. The idea is to then push for an initial investment, using the reassuring argument that even a small amount is enough to start. Sometimes, the investor is even given a personal account on a so-called “online tool” enabling them to personally follow the investment’s progress.
• Building trust and continuation. Once the first payment has been made, a personal follow-up is set up. Everything is done to establish a relationship of trust and encourage more (false) investments. The first investment is presented as a success, with the investor then encouraged to make further investments for ever-larger amounts. The fake advisor then has no qualms in putting the investor under pressure, exploiting the sense of trust created – calling insistently, arguing that this is a fleeting opportunity that should not be missed.

As you will have understood, by the end of the process, the idea is to take as much money as possible from investors who will unfortunately never see it again.

Protecting yourself against investment fraud

• “Too good to be true”: A promise of easy, guaranteed, risk-free money should always make you wary. Remember: there are few high-return investments that do not involve high risk.
• Before committing to anything, research the product and the investment structure on search engines, discussion forums, or consumer sites. What is the product? What is the investment company’s reputation?
• Don't be overwhelmed by an unknown contact. Stop dealing with unprofessional and pushy advisors who are neither interested in your savings needs nor your investment profile.
• Remember to check that the provider is authorised by FINMA (the Swiss Financial Market Supervisory Authority). You can also review their warning list. 

Victim of investment fraud: what to do?

If you think you have been victim to investment fraud, start by monitoring your bank accounts and immediately reporting any suspicious activity or movements you are not aware of. Contact your bank right away to initiate a search and try to recover the money, then file a complaint with the police.

Lastly, take the time to report the incident to FINMA to feed their data and better fight against this type of fraud.

_{See also “Protection against investment fraud” (FINMA video)}