Scams are nothing new, with many people having been caught out by a scammer over the years, but the complex tactics of modern investment scammers means anyone can be susceptible. Kel Galavan, financial educator, explains how widespread investment scams are, why any of us can get caught out, and the simple steps we can take to protect ourselves. Investment scams - what you need to know According to FraudSMART, the awareness initiative led by Banking & Payments Federation Ireland (BPFI), an investment scam “occurs when a criminal persuades an individual to transfer money into a fake or non‑existent investment opportunity. These scams are designed to look legitimate and often involve AI-generated adverts featuring fake images and videos of well-known politicians and businesspeople, professional‑looking websites, fake comparison platforms, and convincing marketing materials. “Once funds are transferred, they are quickly moved through multiple accounts, frequently overseas, making recovery difficult.” Galavan says that investment scams are becoming increasingly complex and harder to detect. “Most investment scams tend to follow a similar pattern. A consumer will see an advert online and are encouraged to click on a registration link to receive more information. They may then receive a call from a so-called ‘financial advisor’ who may sound very professional and convincing. Galavan explains that these scams tend not to be high-pressure in the first instance. “The scams can run over months, using a slow burn effect to build up trust.” The reason for this is that investment scams tend to target substantial sums of money. “Building up trust with the person being scammed is essential for an investment scam to work,” Galavan explains. In fact, many victims of investment scams are not immediately aware of what has happened to them, according to FraudSMART. “In many cases, individuals only realise they are a victim of a scam when the investment is due to mature or when they attempt to withdraw funds and are unable to do so. “As a result, reports of investment scams are often delayed, in some cases up to a year after the initial payment was made.” How the scams operate Galavan discusses the process, whereby scammers encourage victims to know, like and trust them. “I’ve seen a scenario where someone has cloned an existing LinkedIn account of a bank employee and slowly but surely nurtured a relationship with the victim, sent out a brochure, and added them to a WhatsApp group. Then they asked for a deposit to ‘secure their place’ on the investment.” These stories do not belong in the realm of urban myth, Galavan points out. “That’s the biggest misconception people have. “This is an everyday occurrence. The ‘opportunities’ advertised online are many and can include crypto, bonds and portfolio investments.” “Scams are an everyday occurrence," explains Kel Galavan. "The ‘opportunities’ advertised online are many and can include crypto, bonds and portfolio investments.” People in their 50s should be on alert According to FraudSMART, recent trends show that many victims of investment scams like these are in their early 50s, often at a stage in their life where they are actively managing savings or making longer‑term financial decisions for retirement Galavan cites two reasons why this happens. “Once you start hitting your 50s and 60s, you usually have more money, more flexibility, savings, and you are actively planning for retirement or a financial safety net, especially with the cost-of-living crisis and current economic unrest. Compound that with the fact that our timeline to grow money is much shorter, and if we don’t feel secure, we can panic, and it can make us more susceptible to investment fraud. “I see it all the time. People think, ‘I have money, I need to do something with it.’ And that’s the perfect moment for the right pop-up, email, or phonecall.” How to spot a scam Galavan says there are multiple ways to check if an investment opportunity is legit or not. “First of all, look out for the warning signs. Are they promising risk-free returns or a guaranteed monthly income? All investments carry a degree of risk so that’s a major red flag. “If you can’t understand the investment and it’s not clear, step away. Investing is not that difficult, and a good advisor can explain it easily. Look out for cold calls, as no regulated company will give you a cold call, Galavan says. “It’s not allowed. No financial advisor or planner will ever cold call you.” Another telltale sign is the pressure to act, for example a request to give a deposit of €250 immediately. Legitimate investment opportunities will never pressure you to transfer money immediately. Kel Galavan, independent money and investing educator, photographed in Dublin How to protect yourself from investment scams “I’d always recommend talking to a regulated financial or legal professional and discuss with family or friends before making any investment. Other simple measures you can take include checking the firm’s credentials, reputation and history and make sure it is authorised by checking the Central Bank Registers at registers.centralbank.ie. Scamchecker.ie is also a useful tool to help verify if a website is legitimate.” “You’ve worked too hard for your money to put it somewhere and not know where it’s going.” Don’t be embarrassed to report a scam FraudSMART has found that many victims feel embarrassed or ashamed of having been scammed and may not report what has happened. Galavan says it’s no reflection on the person. “Unfortunately, it’s an everyday occurrence, I’ve nearly been caught out myself. We all need to be financially literate because we live in a world where everything moves fast. “A huge part of protecting your money is catching these scams as quickly as possible. One scam could undo decades of your hard work. It’s important to check, go to the source, go to the website of the bank or investment company and get the number separately. And ask about the product. It’s an essential part of being a good steward of your money, how to spot, talk about it, and report it, so others don’t fall for it.” What to do if you suspect or know you’ve been scammed Galavan is blunt with her advice in this instance. “Swallow your pride.”“If you have shared personal information or transferred money and realise it might be a scam, call your bank immediately. But, just as importantly, report it to the Gardaí. They are highly experienced in these crimes, understand how fraudsters operate, and will do what they can to support you. For further information and advice see fraudsmart.ie