Protect Your Financial Investments from ‘Confidence Scams’

Now that technology provides New Yorkers with easier access to investment platforms to grow their money, it is important to be wary of scammers who use sophisticated means to take advantage of people looking to invest their funds.

That is why my office recently issued a consumer alert and an online guide to protect New Yorkers from scams proliferating online—known in English as “confidence scams”—in which fraudsters befriend victims under false pretenses and convince them to make fraudulent investments.

Confidence scams typically target victims through advertisements, social media, dating apps, or unsolicited text messages. After establishing a connection, scammers often move the conversation to an encrypted chat platform—such as WeChat or WhatsApp—where they can conceal their identities from authorities. The scammers then spend a significant amount of time convincing victims to maintain a close personal relationship with them, or to maintain a professional relationship with a supposedly trusted financial advisor.

Once they have earned their victims’ trust, the scammers present them with an investment or trading opportunity, often asking the victim to invest in cryptocurrencies or foreign currencies. To bolster the appearance of success, scammers may share fake screenshots showing how much they have supposedly earned on trading platforms, or send photos of expensive homes, jewelry, or luxury cars that they claim to own. The scammer may also direct victims to fraudulent websites that appear to belong to a legitimate bank or investment firm but feature a slightly altered name.

From that point on, victims are led to believe they are generating incredible profits thanks to the scammer’s help and expertise. Throughout the course of the scam, victims often see their account balances appear to rise. In turn, the victims place even greater trust in the scammer and invest additional funds. After victims deposit substantial sums of money into the scammer’s platform, they lose access to their funds or are asked to pay upfront withdrawal fees or bogus taxes, with the promise that their investment earnings will be released. Ultimately, the scammers cut off contact with the victims and steal their money.

Our office recommends that New Yorkers follow these basic steps to avoid falling victim to confidence scams or any other type of fraud. This includes being suspicious of anyone who:

• Warns you not to tell anyone about your relationship with them or about the investment opportunity they are offering.
• Interferes when your bank or brokerage firm questions a transaction you have been instructed to make.
• Avoids transferring money, sending cryptocurrency, or giving cash to strangers. These transactions are irreversible.
• Asks for personal financial information or private photographs, which could later be used for extortion.
• Promises to meet you in person or via video call but always finds an excuse to cancel. Be aware that video calls can be faked.
• Instructs you to hand over cash or a check to a courier or delivery person, or to use a Bitcoin ATM.
• Requests to move your text and email conversation to WeChat, WhatsApp, or other encrypted platforms.
• Consult a trusted legal professional or financial advisor who can provide guidance on investment opportunities.

From the very first day of my term, I pledged to help those most in need, and my office is always here to assist and protect New Yorkers from predatory business practices such as confidence scams. Scammers go to great lengths to gain their victims’ trust and convince them to send over their life savings, thereby ruining their victims’ finances. I encourage all New Yorkers, regardless of their immigration status, to remain vigilant and contact my office—by filing a complaintonline or calling 1-800-771-7755—if you or a loved one is affected by one of these scams.

Letitia James is the Attorney General of New York State.