How to detect investment scam and protect yourself from it

Region: Europe
Jan 29, 2024, 5:49:07 PM Published By Wirex Team

In 2022, the UK fell victim to investment scams, losing a staggering £140 million to deceptive schemes. Investment scams have become increasingly sophisticated, with fraudsters utilising websites, testimonials, and marketing material to create an illusion of legitimacy.

This blog aims to shed light on investment scams, their red flags, and offer practical tips to safeguard your hard-earned money.

What is an investment scam?

An investment scam is a fraudulent scheme designed to trick unsuspecting individuals into parting with their money. These scams often appear genuine, featuring professional-looking websites, testimonials from supposed success stories, and persuasive marketing materials. The allure of attractive rewards serves as bait to lure in potential investors.

Red flags to look for

  • Too good to be true: If an investment opportunity promises returns that seem too good to be true, exercise caution. Scammers often entice victims with unrealistically high rewards to create a sense of urgency and excitement.
  • Guaranteed rewards: Legitimate investments come with inherent risks, and there are no guarantees in the financial world. Be sceptical of any scheme that assures you risk-free, guaranteed returns on your investment.
  • Pressure to invest more for higher rewards: Scammers employ tactics like pressuring individuals to invest more money with the promise of even higher returns. Legitimate investment opportunities allow individuals to make decisions at their own pace without coercion.
  • Constant communication to build trust: Fraudsters often engage in constant communication to build trust and credibility. Be wary if an investment representative is excessively persistent, trying to convince you to invest without giving you the necessary time for due diligence.

Tips to protect yourself

  • Conduct due diligence: Before investing in any platform, conduct thorough research. Read reviews, ensuring they are genuine and not generated by robots.* Verify the legitimacy of the platform and the individuals involved.
  • Read terms and conditions: Pay close attention to the terms and conditions of the investment platform. Scammers often neglect to provide clear and comprehensive terms, so make sure you understand every detail before committing any funds.
  • Beware of outside account requests: Legitimate investment platforms operate with in-house exchanges. If you're asked to open an account outside the platform or transfer funds to a third-party account, consider it a red flag. Reputable platforms handle all transactions within their secure environment.


Investment scams pose a serious threat to individuals seeking financial growth. By remaining vigilant and aware of red flags, you can protect yourself from falling victim to deceptive schemes. Always conduct due diligence, thoroughly read terms and conditions, and be cautious of high-pressure tactics. Safeguarding your finances requires a proactive approach, and with the right knowledge, you can navigate the investment landscape more securely.

*Tip on Fake review: too many reviews in one day / month; too many good reviews; all reviews quite recent, within last few month.