AI-Powered Investment Scams Are on the Rise: 13K Fake Sites Detected in January

Cybercrime experts detected and blocked almost 13,000 fake investment domains across more than 7,000 IPs in January 2024 alone, a 25% rise since December 2023.

The figure emerges amidst increasing worries about the rising danger of online investment scams, which continue to target unsuspecting victims globally.

The data released by the Federal Trade Commission (FTC) reveals that US consumers lost more than $4.6 billion to investment scams in 2023, a 21% increase over 2022. “Digital tools are making it easier than ever to target hard-working Americans,’’ said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a press release.

According to an advisory from cybercrime disruption provider Netcraft, the scams operate via sophisticated fraudulent investment platform domains, luring victims through emails, social media posts, or deceptive advertisements.

One common technique outlined in the advisory was enticing users into joining fake investment advisory groups on platforms like Meta, WhatsApp, and Telegram.

The self-proclaimed “experts” or “financial analysts” in these groups advertising investment opportunities are often bots that follow a scripted conversation. The bots are designed to provide legitimacy and create an illusion of risk-free profitability.

Neobank and Fintech company Revolut also stated that the origin of 60% of its UK scams in 2023 took place via Meta. In early 2023, Barclays Bank revealed that more than 70% of scams were happening via social media, online marketplaces, and dating apps.

Additionally, scammers have also been observed using phishing emails to entice victims. Promising high returns, these emails contain malicious links to fake investment platforms. Though these cloned financial sites seem legitimate, they are filled with warning signs, such as a tiered investment structure and unrealistic promise of return on investment (ROI).

Another sophisticated tactic is where investment scams are combined with advance fee fraud. The victim is tricked into making an upfront payment in lieu of accessing substantial inheritance funds.

Many fake investment platforms discovered by Netcraft contained professional-looking financial dashboards. The scammers were seen using different manipulation techniques, thus creating an illusion of real trading activity designed to lure victims into making large investments.

“Regardless of the tactics adopted, once the victim invests heavily and then attempts to withdraw a large amount of funds, the site operator or account manager will present excuses to explain why this is not possible […] leaving the victim massively out of pocket,’’ Netcraft’s advisory reads.

The increasing prevalence of online investment scams necessitates the deployment of robust security measures, including awareness to identify and safeguard oneself against the cyber fraud tactics used by the scammers.