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Relationship Investment Scams ‒ Protect Yourself

In a relationship investment scam, scammers reach out online or through text messages, attempting to build trust through friendship or a romantic connection to convince you to put money into phony investments.

Relationship investment scams are called various names, including romance scams, crypto/cryptocurrency investment scams, financial grooming scams, and “pig butchering” scams. These frauds can be devastating, and cause investors to lose billions of dollars every year.

Key Takeaways

These scams involve a “long con” where scammers build trust through friendship or romance over time. Ignore messages from anyone you don’t know and consider deleting or blocking them.
Be wary of unsolicited investment opportunities no matter how much you trust the person.
If you suspect you may be caught up in one of these scams, stop communicating with the individuals immediately, and do not give them any more money.

Learn how relationship investment scams work, what to look out for, and how to protect yourself and others.

How the Scam Works

Scammers make unsolicited contact

They may:

Contact you online or on social media platforms — including professional networking, dating, and messaging websites/apps;
Send you a text message pretending to be an old friend or claiming to have contacted you accidentally;
Place ads on social media or add you to a group chat that you didn’t join;
Use an auto dialer to blast out text messages to thousands of people that appear intended for someone else, seeking to prompt a response;
Offer financial advice or express romantic interest; or
Quickly move communications away from the initial platform to a different, sometimes unmonitored space.

Scammers gain your trust over time

Scammers build trust through friendship, romance, or an offer to help achieve financial goals, typically over a period of weeks or months – known as a “long con.” They may suggest meeting in person but then come up with excuses so it never happens. In romance scams, they’ll often pledge their love quickly. Once a scammer has established a relationship or friendship with you, they may offer their advice on trading, or claim to know about profitable opportunities.

They may impersonate legitimate investment professionals or brokerage firms, or say they or someone they know is an “insider” who can provide valuable trading recommendations.

Scammers may also steer you towards investments involving crypto assets. You may think you’re buying into a crypto asset investment when you’re actually just sending money directly to their accounts or wallets.

They often use fake testimonials to convince you that others have invested and made money. Some scammers pay people to post fake online reviews or appear in videos falsely claiming they got rich from an investment. Scammers may also use altered images or videos to lead you to believe that others have made money on their platform. New artificial intelligence (AI) technologies can make these images and videos convincingly realistic.

Scammers steal money from you — often through fake investments

Scammers may direct you to a legitimate looking (but fake) website or to a popular mobile app. Just because an app is available on a well-known app store doesn’t mean that the app itself, or the activities conducted within it, are legitimate. Scammers can lead you to believe you are doing well trading by sending fake screenshots, showing fake trading information, or manipulating your online account to make it appear that the “investments” and “earnings” are “legitimate.”

They may tell you to wire cash or obtain crypto assets— such as bitcoin, ether, or tether — at a bitcoin ATM (or kiosk) or through a crypto asset platform in order to make investment deposits. An investment may not be legitimate if you are required to pay for it with crypto assets. If you wire money outside of the U.S. or use crypto assets for an investment that turns out to be a scam, you will likely never see your money again.

Scammers may ask for more money to get funds “released.”

They may ask you to invest larger sums of money. However, when you try to withdraw your funds, the scammer will come up with an excuse why it isn't possible, say more money is required, or tell you for the first time that you must pay more to cover fees or taxes. Frequently, you will never recover your investment or any “profits,” so paying additional funds only causes you to lose more money.

After breaking off contact with you, the scammer will reach out to you pretending to be someone else, such as a representative from a government regulator, law firm, or some other entity that has supposedly recovered your funds. Scammers may send you phony paperwork and eventually demand an upfront payment to release funds.

How to Protect Yourself

Ignore messages from senders you don’t know and consider deleting, blocking, and reporting their messages.

Make investment decisions independent of the advice of someone who makes unsolicited contact with you online or through an app or text message.

Research investment opportunities thoroughly and ask questions.

Protect information relating to your personal finances and identity (including your bank or brokerage account information, tax forms, credit card, Social Security number, passport, driver’s license, birthdate, or utility bills). Don’t share it with someone you don’t know who contacts you online, on a social media platform, or through text message.

Never pay money to recover your investment or make an upfront payment to release funds.

If you suspect you may be caught up in a relationship investment scam, stop communicating with the individuals immediately and don't give them any more money. Report the scam to the SEC.