Cyprus Securities and Exchange Commission | CYSEC GUIDE: HOW TO AVOID SCAMS
CYSEC GUIDE: HOW TO AVOID SCAMS
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CYSEC GUIDE: HOW TO AVOID SCAMS
With this guide you will learn:
  • How to protect yourself from investment scams.
  • How to make sure you are dealing with an authorised firm.
  • How to avoid fake investments that sound too good to be true.
 
It is important to note that:

  • Scams are becoming increasingly more sophisticated.
  • Fraudsters can be articulate and convincing, seem to be financially knowledgeable, use a professional demeanor and make use of seemingly credible websites, with testimonials and materials that look genuine.
  • It can be hard to distinguish fake investments from the real thing. 
  • Always remember that, if it sounds too good to be true, it probably is.
  • If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or the Investor Compensation Fund so you’re unlikely to get your money back if things go wrong.
  • If you use an authorised firm, access to the Financial Ombudsman Service and the Investor Compensation Fund will depend on the investment you are making and the details of your case.
 
PROTECT YOURSELF.

We have observed that:

  • Individuals looking to scam people are targeting consumers searching for investments online, in particular through popular search engines (like Google) or are often advertised online through web-based applications and social networks (like Facebook).
  • The fact that the website of a firm displays the CySEC logo or mentions that they are “Authorised by the Cyprus Securities and Exchange Commission”, does not necessary mean that this firm is authorised or regulated by CySEC.
  • Most scammers tend to offer high returns to tempt consumers into investing their money, however they may also offer relatively realistic returns in order to make their offer appear more legitimate.
  • Firms offering or promoting products or investment opportunities that may be found through search engines or that may directly approach investors are not necessarily authorised or regulated by CySEC.
  • Reject unexpected offers: If you’re contacted directly about an investment opportunity, and without initiating it yourself, it is very probable that this concerns a high-risk investment or scam.
  • ​​​​If you receive a scam call, the safest thing to do is to hang up. If you get unexpected offers by email or text, it’s best to simply ignore them.
  • Be wary of follow-up scams that may related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.
 
AVOID FAKE INVESTMENTS.

Spot the warning signs:

  • Unexpected contact ​​​​– traditionally scammers call you unexpectedly, but contact can also come from online sources e.g. email or social media, post, word of mouth or even in-person, at a seminar or exhibition.
  • Time pressure – they might offer you a bonus or discount if you invest before a set date or tell you that the opportunity is only available for a short period of time.
  • Social proof – they may share fake positive reviews and claim that other clients have earned a lot of money or that this investment is very popular.
  • Unrealistic returns – fraudsters often promise tempting returns that sound too good to be true, such as much higher returns than other options. However, scammers may also offer realistic returns in order to seem more legitimate.
  • False authority - using convincing signatures or logos and websites, claiming to be regulated, speaking with authority on investment products.
  • Flattery – scammers may try to build a friendship with you to induce a false sense of security, to make it seem like they have a legitimate interest to help you succeed.
  • Remote access – scammers may ask you to download software or an app so they can gain access to your device. This could allow them to access your bank account or make payments using your card.
 
CHECK IF A FIRM IS REGULATED.

  • Check CySEC’s authorized entities list to ensure the firm is authorized by CySEC and the contact details match those of the authorized firm, before you decide to transact with it.
  • Always access CySEC’s website directly, rather than through links in emails or via the website of a firm that is offering you an investment. 
  • Check CySEC’s Warning List to see if the firm is known to be operating without our authorisation. Even if a firm isn’t on our warning list, it could still be a scam – firms change names and details all the time.
  • Check CySEC’s approved domains list to make sure they are not a «clone company» and you are not in fact being transferred to an unauthorised domain.
  • Check the Warnings issued by foreign Regulators if you’re dealing with an overseas firm, or check with the Regulator in that country.
 
IF YOU SUSPECT A SCAM, REPORT IT.

  • If you have any concerns at all about a potential scam, end all contact and inform us immediately.
  • If you’ve given your bank account details to a firm you think may be operating a scam, tell your bank immediately. They may be able to cancel a transaction that has not been completed yet. 
 
10 October 2021 13:00
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