Stealing-g25fb50ff2_640An “investment opportunity” extremely popular on the social media platform WeChat stole millions from the Chinese community in the United States. Social media posts urged people to “invest” in various household goods and electronics, promising returns of 20-40 percent in one to three months. But it was really a scam, according to the Federal Trade Commission.

Using WeChat groups, scammers heavily promoted the investment with pictures and stories about supposed successful investors.

To invest, people agreed to over-pay upfront – as much as three times the retail price – to buy items such as iPhones, laptops, and furniture. In exchange, scammers promised to return investors’ money in one to three months. And, as a thank you for investing, investors got to keep the products for free.

At first, scammers shipped products and paid out some investors, leading people to sink more money into the scheme. Actually, there wasn’t an investment and what little scammers paid out was money they stole from new investors.

“It was all a lie,” said Tiffany Smedley, investigator for the FTC’s East Central Region.

To build trust, scammers often use common bonds – such as shared language or culture, Smedley said. They exploit these relationships and pitch can’t-miss investment scams.

To spot the scams:

  • Don’t believe promises that you’ll make money, get a big payout, or earn guaranteed returns. No one can guarantee you’ll make lots of money with little to no risk. Anyone who does is a scammer. Those testimonials or photos from people who supposedly made it big are easily faked.
  • Ask online group moderators to remove people pushing investments. Or, if you’re a group moderator, remove anyone offering advice or “help” with investing to prevent scams.
  • Research before you invest. It pays to search online for the company or person’s name with the words “review,” “scam,” or “complaint.” Find out how the investment works and where your money is going.

If you need help making investment decisions while avoiding fraud, visit Investor.gov.

Originally Published on https://boomersurvive-thriveguide.typepad.com/the_survive_and_thrive_bo/

Rita Robison Consumer & Personal Finance Journalist

For more than two decades, Rita R. Robison has been a consumer and personal finance journalist making her living by finding the best bargains, calling out the crooks, and advocating for regular people just like you and me. In that time, Robison has talked to so many people who feel like their money just isn’t getting them what they want, where they want to be, or the life they thought it would.

The purpose of her blog is to help you get what you want from your money. Robison covers financial goals, budgets, debt reduction, saving, smart choices for buying goods and services, and retirement planning. You’ll also find articles on safety, such as avoiding scams, looking out for rip off companies, and getting informed on the latest recalls.

Tagged: , , , , , , , ,