Fraud Unmasked: Protecting Yourself from Scammers

“Fraud Unmasked” dives into the growing threat of online financial fraud, with expert insights on how scammers use deceptive tactics to target your money. Join host Andrew Wilkinson and guest Gerry Perez as they uncover real-world scams, share tips to protect yourself, and highlight ways to spot fraud before it’s too late.

Summary – IBKR Podcasts Ep. 197

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Andrew Wilkinson 

Today’s episode covers the controversial subject of online financial fraud and scams. My guest today is Gerry Perez, Managing Director in London for Interactive Brokers UK. Gerry, welcome. 

Gerry Perez 

Thank you, Andrew, for having me on such an important topic. 

Andrew Wilkinson 

Let’s tell the audience about this one. I get a lot of fraudulent emails in my inbox these days and I like to think that I’m smart enough to not fall foul of malicious emails and links to websites. But I have to admit these are professionals and the stakes are high.  

Gerry, what do scammers and fraudsters want from customers? What’s the end game? 

Gerry Perez 

So scammers and fraudsters are the people behind financial crime. They use very deceptive tactics such as identity theft and cybercrime to gain access to your personal information and financial assets. They will try to contact you through various means, such as email, phones, social media, or posts with convincing, but ultimately false narrative. 

It’s crucial to know about their tactics, to be able to protect yourself. This is a material problem. It’s not just about money, but it’s about protecting you, and we almost work together to protect each other. 

Andrew Wilkinson 

Gerry, can you give me a couple of examples of how this works? 

Gerry Perez 

Sure. Scammers use many deceiving tricks, and they will target anyone, anywhere, at any time. A couple examples could be cloning websites, a form of phishing. Scammers will clone legitimate firms’ websites and make public URL addresses, which seem similar to the legitimate company, but they are not. Website cloning tends to be quite sophisticated and involves a number of factors throughout the process. 

If you look carefully, you will find slight changes to the domain address. Thereafter, the aim is to target individuals by emails or other means to get them to visit the cloned site and share their personal details, or worse yet, send their assets. How can you protect yourself? One way is to check your local regulator’s website like the FCA for public notifications about reported clone sites acted unlawfully yet. 

Another means is to check the regulator’s website against URLs provided to you. Before you decide to engage or send assets, legitimate companies must provide their URL to the regulator, which is on a public database for you to validate. Next, investment groups are social media sites that purport to be legitimate companies, but again are not. 

These groups make public posts claiming to offer a surefire investment with large returns. For example, stock winner, you get 700% profit with payments at the end of the year. If you follow their strategy, you win. However, you have to turn over your money first to scammers. They ask you to send money to their third-party website away from the legitimate company. 

And once you do, they have you. How do you protect yourself? Watch out for red flags. For instance, don’t fall for these false claims of getting rich schemes, especially on social media. Don’t turn your identity or assets until you are sure you’re dealing with a representative of a regulated financial services company that can be verified with your local regulator. 

Andrew Wilkinson 

Gerry, let’s talk about what Interactive Brokers does and what they don’t contact clients about. What should investors look out for in communications from Interactive Brokers? 

Gerry Perez 

IBKR does not cold call consumers to offer services or products or make investment recommendations. IBKR does not directly interact with customers through social media channels. IBKR’s preferred way to communicate with its customers is through our secure client portal for customers to feel safe and secure. 

Andrew Wilkinson 

Tell me about the type of things that Interactive Brokers UK does not contact the customer about. 

Gerry Perez 

We will never contact you login details. We will not contact you to get remote access to your computer or mobile device. IBKR does not give advice as it’s an execution only broker, so we will never call you and give you advice. 

Andrew Wilkinson 

Gerry, regardless of your local broker, can you outline some of the reasons cited by scammers to get in touch with investors? 

Gerry Perez 

Sure. One of them is pump and dump or ramp and dub schemes. In these schemes, the scammers try to manipulate a stock. Usually a low cap stock. The scammers will first buy the stock and then they spread false narrative or misleading information through various means, social media, or they’ll contact you through cold calling to create a buying frenzy. 

Then they will leave a voicemail saying, ah, I’ve got an insight tip from an insider. Go buy the stock now. Don’t wait. It’s all about urgency. The scammers then dump their own shares at a very high price and stop hyping the stock, leading to investors to lose money as the stock price falls. All these recommendations may be presented as hot information or insight tips from people inside a company and made available to you to a form of being privileged or having the opportunity to act upon them. 

However, it’s all a scam. Scammers often take full advantage of any tactics to spread false or misleading information about a company’s stock price. For example, trading recommendations, which are frequently spread through social media. Beware, be careful, and be cautious. 

Andrew Wilkinson 

And Gerry, I’ve heard a lot about fraudsters depriving investors of hard-earned pension plans. What’s that about? 

Gerry Perez 

Yes, as reported by the Financial Conduct Authority in the United Kingdom, a quarter of consumers would consider withdrawing money for their pension early than planned to cover the cost of living. However, these individuals then become a target of scammers. What they do is they lure these pension holders by telling them, ah, I’ve got a surefire way to actually take your earnings that you’ve worked so hard to save and put them in these outlandish claims of surefire returns. 

Moreover, they’ll go to the pension holder before they liquidate and they say, hey, I’ve got a great tax scheme that allows you to take your money before retirement and still take advantage of not paying taxes. All of these are scams, so you have to be aware. The way you do so is to make sure that you deal with legitimate companies or representatives of those companies. 

A lot of regulators like the Financial Conduct Authority hold a database on their website where you could check the identity of individuals that work for legitimate, authorized, and regulated companies. In addition, you could check the details of these companies. So take advantage of the FCA website or other regulators websites that allow you to cross reference to validate. 

Andrew Wilkinson 

Gerry, when I was researching for this particular episode, I saw the term “Holy Grail”. Tell the audience about “Holy Grail” Trading Systems and why these are scams. 

Gerry Perez 

Sure, so the Holy Grail is a deceptive scheme, which leads to victims taking part of a strategy that’s going to make them money. Scammers will provide guaranteed returns. However, there’s nothing guaranteed in financial services. Remember, you have to always be very careful. So the scammer lures you by giving you the cheese, as we will call it. 

The victim unknowingly takes the bait and they start to now provide the scammer information. That could be personal information. They, the scammer then starts to earn the trust of the individual. All of this is something that you have to be very careful. Once this happens, they have the trust of the victim. 

So now, what they do is basically lure you into transferring over your assets, giving them access to your bank accounts. And this is where the victim falls for these tactics. And all of a sudden, this holy grail actually turns out to be a wholly deceptive scheme to take your money. 

Andrew Wilkinson 

Finally then, Gerry, where should investors look for more information if they do suspect a scam? 

Gerry Perez 

Great question. Again, please go to your local regulator, go to your local police websites, which also provides you information on how to protect yourselves from all these types of scams. Use a simple framework, confirm the identity of the company or the individual on the other end, strengthen your digital defense, which includes strong passwords, security software, education is at the forefront of protecting yourself, so stay informed. 

Do a little bit of research on the regulators website, on search engines to learn a little bit more. Keep an eye on your personal information, like your statements, regularly review them, make sure there’s no activity that you’re unaware. And if you do come across something that’s suspicious, promptly report it to your local police or regulator. 

Be vigilant, make use of education, be proactive. This will keep you safe. And remember, these financial crimes, this is not a victimless crime. These are mothers, fathers, siblings, young, old, and vulnerable people. You need to be engaged to help stop the fraud and work together. We need to stop it as an industry and a marketplace, and we really need your help. 

Andrew Wilkinson 

Gerry Perez, Managing Director, Interactive Brokers UK. Thank you very much for your time this afternoon for joining me. 

Gerry Perez 

Thank you, Andrew, and all the best. 

Andrew Wilkinson 

All right. Thank you. And thanks to the audience for listening in and don’t forget to subscribe to IBKR Podcasts wherever you download your podcasts from.