Investment scam

Finns lose dozens of millions of euros to investment scams every year. Why are these scams so effective and how will they look in the future? Nordea's anti-fraud experts Sara Helin and Annukka Multanen are joined by a guest, the Finnish writer and journalist Karo Hämäläinen.

Can't see the video? You can listen to Fraudcast directly on the following channels: SpotifyOpens new window, SoundCloudOpens new window ja YouTubeOpens new window. Podcast is only in Finnish.

An investment scam is a fake but extremely appealing investment opportunity. This opportunity is promoted on various websites and on social media. The scammer may try to lure people into investing in shares, funds, virtual currencies or binary options. What the investments have in common is that their future prospects sound almost too good to be true. If the victim clicks on the ad and submits their contact information, they start receiving numerous requests to invest in the instrument in question.

Often an investment scam will begin with an initial payment of a few hundred euros. The scammers will send their victim regular messages about the performance of their investment. In the messages, they will also ask the victim to invest more money in the highly profitable assets. In reality, the investment doesn’t even exist and the money paid by the victim is pocketed by the scammers. 

Investment scams have become increasingly common in Finland in recent years. Of all the different types of scams, Finns lose the most money to investment scams. The best way to avoid falling victim to investment scams is to learn how to spot them.

As with other types of scams, an investment scam usually starts by the scammer contacting a victim, for example, on social media, on WhatsApp, by SMS, via email or by phone. The scammers may also reach out to the victim through more than one channel to seem more convincing. 

The opportunity to get rich quick and convincing testimonials from other investors may make it difficult for the victim to question the legitimacy of the offer. If the offer seems too good to be true, take a moment to consider whether this could be the case. If you have any doubts, it’s a good idea to discuss the investment opportunity with your friends or family. 

Here are some red flags that can help you spot an investment scam: 

• You are promised a high return for very little risk. If the investment opportunity sounds too good to be true, it usually is.
• The investment opportunity is promoted online or on social media, possibly by celebrities.
• The initial investment required is a few hundred euros. You may be promised a dedicated investment adviser or a team of advisers at the start.
• You are rushed or pressured to make decisions. The investment opportunity is only available to a selected group of people, and it is promoted as an “exclusive offer” or a “limited edition”. The scammer tries to create a sense of urgency.
• The scammer contacts you by phone or email to offer you an opportunity to invest. The call, WhatsApp message or email comes from an unknown person abroad. The language used is often English.
• The service provider is not authorised by the Finnish Financial Supervisory Authority (FIN-FSA) to provide investment services in Finland or does not have an equivalent foreign licence accepted by the FIN-FSA. You can check the FIN-FSA’s registerOpens new window for authorised service providers.