Online investment fraud offenses are on the rise. This year, more than 800 reports have already been received by the police across Switzerland. Stefan* was the victim of such a scam and tells about his experiences.
Crypto platforms dashboards all look similar and therefore can be easily faked.
Stefan is stressed. He sits at home in his office and works through order after order. It’s his home office day. Suddenly the cell phone rings – an unknown number. A certain Moritz Wagner is on the phone. He pretends to work for the support department of a crypto platform. He informs Stefan that his account has been blocked: There has been a hacking attempt. He now wants to help him transfer the money on it to his bank account or another wallet. Because the account cannot be reactivated.
Stefan is surprised. He cannot remember that he opened an account on this platform, and certainly not that cryptocurrencies worth almost 200,000 francs are said to be on it.
Unexpected windfall
Moritz Wagner convinces Stefan of the opposite: there actually is an account in his name, he assures him. He asks him to log in to the platform with his email address. Moritz Wagner sends him the password, which increases Stefan’s trust in the caller: how would the caller know his password if he wasn’t really an employee in the support department of this platform?
Stefan also remembers transferring an amount in the cryptocurrency Ethereum to his sister a few months ago. The platform Wagner directed him to is similar to the platform he used to transfer money to his sister.
Perhaps a small amount remained on the platform, the value of which has now risen to 200,000 francs in a very short time? No, that can’t really be the case, Stefan thinks to himself. But the amount is in the account overview, and above it is his name. The enthusiasm about the unexpected windfall exceeds his skepticism.
He obviously invested at the right time, says Wagner. In any case, the caller is highly competent, customer-oriented and throws technical terms around. Stefan can hardly speak. Out of sheer fear of appearing stupid, he doesn’t dare to ask questions. Fraudsters like Moritz Wagner have mastered this manipulation tactic inside out.
Cheater hits jackpot
What Stefan doesn’t know: the supposedly hacked crypto account with the 200,000 francs doesn’t exist, it’s a facade.
Next, the fraudster Wagner tells him that he has to transfer the 200,000 francs to one of his bank accounts or another crypto wallet. Wagner builds up subtle pressure to do the transaction right now. Stefan should actually be working. But he doesn’t want to miss out on the lucrative sum of money. But he’s not particularly tech-savvy. He doesn’t know how to transfer the money.
Fatally, Stefan then tells the scammer that he has an account with the crypto platform Binance: you can transfer 200,000 francs to it. He created this some time ago because his sister advised him to invest in cryptocurrencies. Like many others, he jumped on the crypto train during the corona pandemic and bought Bitcoin and Ethereum worth 20,000 francs.
A few clicks and the money is gone
Then Stefan makes the crucial mistake: he gives Moritz Wagner access to his computer so that he can transfer the 200,000 francs to his Binance account. Wagner says he shouldn’t worry and assures him that the money will be in his Binance wallet by evening. He sends him a payout slip as proof.
Stefan ends the call with a queasy feeling. The joy of the unexpectedly acquired fortune does not really want to set in. At the end of the day, his uneasy feeling gives him no peace and he logs in to Binance again.
Then the shock: the Binance account is empty, cryptocurrencies worth 20,000 francs are lost. And of course not a trace of the promised 200,000 francs.
crimes are increasing
Since that fateful day, Stefan no longer dares to answer calls from strangers. The fear that the incident could repeat itself is too great. He is not an isolated case.
The wealthy Swiss are a worthwhile target for the international scammers. Academics are just as affected by online investment fraud as are tradespeople, students, young and old people. So it is not surprising that the crimes have increased since investors have become more interested in cryptocurrencies.
Serdar Günal Rütsche, head of Nedik (network for digital investigation support for cybercrime), has observed an increase in online investment fraud offenses since the corona pandemic. This year (as of October), more than 800 advertisements have already been received throughout Switzerland. The amount of the crime is already 70 million Swiss francs. Günal Rütsche estimates the number of unreported cases to be 20 times higher. That would be almost 1.5 billion Swiss francs. “It may well be that the collapse in cryptocurrency prices due to the FTX bankruptcy will now lead to a new wave of fraud cases. After all, low prices are a good argument for convincing potential victims to invest,” says Günal Rütsche.
Many victims are ashamed and do not report it to the police. But that would be absolutely necessary in order to achieve success in the fight against the scammers. Because the time factor plays an important role, because many fake platforms are offline again just a few days after the fraud and can then no longer be tracked. “We know exactly what questions to ask to find out how the fraud happened,” says Günal Rütsche. The clear-up rate is in the low single-digit percentage range. Nevertheless, it is the only way to get the money back if necessary and to protect others from such fraud methods.
95 percent of scams are organized abroad. The groups are often not assigned to a single country. However, it is striking that financial fraud is often organized in Asia or Eastern Europe. However, it would not be possible without support from Switzerland. The scammers recruit accomplices in Switzerland who help them with money transfers abroad or with telephone calls, which must be made in the local language. The people recruited are not always aware that they are part of a fraudulent network.
Fake platforms and apps
In online investment fraud, victims are not only lured with cryptocurrencies, but also with conventional, supposedly lucrative investments. The procedure usually follows a sophisticated scheme:
- baits: Victims are alerted to lucrative investment opportunities via emails, ads on Google or social media, and dating apps. Fraudsters are also increasingly advertising with celebrities as testimonials. Advertisements on reputable news platforms are very perfidious. Because when it comes to advertising on the news portals of well-known media houses, nobody suspects anything. If the victims click on such an advertisement, a fake platform usually appears on which they can leave their personal contact details. Some links lead to fake apps in the App Store. At first glance, they also inspire confidence. Because many users do not assume that a fraudulent app will be included in the app stores.
- Personal first contact: Shortly after registering on the fake platform, scammers contact victims by phone. They persuade victims to transfer a small amount and send them access to a personal account on the fake platform. There they are then given the illusion of positive performances.
- Confidence building: The scammers work in a highly manipulative manner and have mastered numerous psychological tricks in order to dupe their victims. They open wallets for their victims on real crypto platforms, which they then also have access to. Or they get the victims to share the screen with them for remote maintenance.
- Margin: As soon as the victim wants to withdraw the money, the scammers say that this is not possible. First, money must be transferred to pay taxes. Or there was an unforeseen crash. In this phase, fraudsters often say that the chosen form of investment requires an additional payment.
- Realization: After the victim realizes the loss, the scammer cuts off contact. Sometimes, years later, the perpetrators try to contact them again by telling the victims that the money is now available again. Of course only for a fee.
There is no need to be ashamed of anyone who has been the victim of online investment fraud. The scammers’ methods are becoming more and more perfidious. Bank employees and crypto influencers have also fallen victim to such scams privately. As soon as you notice the fraud, you should call the bank. It may still be able to stop any transactions. After that, the police must be informed.
* Name changed by editors.
How can I protect myself against online investment fraud?
- Check if the provider has a Finma approval has or on the Finma warning list is listed.
- On the cybercrimepolice.ch website, investors can easily report scams they have fallen for. Also be here suspicious platforms listed.
- Never entrust money to someone you only know virtually.
- No reputable support asks for passwords by phone or email.
- Do not grant access to your own computer using remote maintenance software such as TeamViewer.