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How to Identify Scams and Protect Yourself?
Phishing Scam

MARCH 22, 2021

How to Identify Scams and Protect Yourself?

Christophe Diserens

CCO

Scams target people of all backgrounds. Scammers succeed because what they propose to you seems real, but usually, they are too good to be true. At SwissBorg, we want to educate our community not only about finance and wealth management but also about safety. Here are a few tips that should help you to avoid getting scammed.

When contacted by a person or a business institution over the phone, by email, or on a social platform, always consider the possibility that it may be a scam. Be sceptical and do not take offers at face value.

For our top tips on how to protect yourself from scams, as well as common red flags to avoid, check the end of the article. 

Otherwise, here are some of the most common types of scams.

1. Social media scams

Financial services scams

In some cases, a person might contact you over social media offering services as a financial advisor, professional trader or investment adviser. In these cases, the scammers often ask their target to download an app so they can easily exchange fiat currencies for cryptos and send funds back and forth.

Important: These scammers may recommend downloading a legitimate crypto exchange or wallet app. However, just because the app itself is legitimate does not mean the scammer is providing legitimate financial services.

Often these scammers will start by offering their target a free trial of their services, where they trade with their own money and offer the target some of their profits as a way of building trust.

One their target has downloaded the app, the scammer will ask the person to transfer small sums to the app, exchange the money for crypto and then send the crypto to the scammer. The scammer then claims they will use these funds for trading, and will start sending ‘profits’ to their target’s bank account, which will then need to be transferred to the app and converted into crypto to send back to the scammer for further trading.

In this case, the amounts grow larger over time and there are often many transfers going back and forth in the same day, which is designed to confuse the target, so they can’t keep track of what is their own money and what belongs to the scammer.

This is a case of if it sounds too good to be true, it probably is. If someone contacts you out of the blue offering up front profits as part of a free trial, and then aggressively pressures you take part in an investment or trading scheme, act with caution.

Impersonating well-known people/companies

Hopefully, most of you would recognise this pretty quickly as something that’s too good to be true. The social media platforms of legitimate companies like Binance (below) are copied in an effort to acquire access to your personal information or wallet through impersonating the legitimate company. This can happen with a social media handle that is similar but slightly different than the official one.

Binance Scam

Check out our video on how to spot scam pages on social networks: https://www.facebook.com/swissborg/videos/619504315185359/

At SwissBorg, we will never message you first by SMS or social media. We will also never ask you for sensitive information like your private keys, email address or telephone number.

2. Phishing scams

Phishing is a type of scam that attempts to trick you into willingly giving over your personal information, which can then be used for malicious purposes.

Impersonating a website or service

One of the easiest scams to fall for is clicking on a link that you think will take you to a website (like an online wallet or exchange) but it instead takes you to a clone. The fake site will ask you for your login credentials, and/or other personal information, and will then be able to sign in to your account on the real site, potentially stealing any available cryptos. 

So, when looking at a website be sure to check the URL and see that it has a lock symbol and that the website address is correct and does not have anything strange symbols or characters before the https part. If the HTTP does not have an S at the end, it means the site does not have a security certificate. This doesn’t mean the site is necessarily a scam, but you will know to be more careful.

Secured URL
Phishing Scams

Sending fake emails to obtain information

Who has not received the classic email from some prince of Nigeria who really needs help in making an urgent bank transfer? Similar to the previous example many crypto scammers will send fake emails trying to acquire your personal details. They will often craft emails to look like they are coming from an official source, and ask for you to ‘confirm’ your details. So of course, once this happens, they have full access to whatever is in that account.

Here is an example of a legitimate email from SwissBorg - notice the correct URL in the sender address (@swissborg.com), as well as swissborg.com in the ‘signed by’ field.

SwissBorg email

3. Ponzi or pyramid scams

A Ponzi scheme is a business model that relies on members earning money based on the investment of new members, rather than selling any actual products or services. The name originated with Charles Ponzi, who promised 50% returns on investments in only 90 days.

Two famous examples:

  • Bernie Madoff pled guilty to the largest Ponzi scheme in history. He successfully swindled investors out of $65 billion in 2009.
  • Bitconnect with people pouring their life savings into the company after being guaranteed incredible daily and weekly returns.

The bigger the schemes grow, the more unsustainable they become.

Red flags to be aware of

If you aren’t sure whether you have been made the target of a scammer, here are some common red flags to be aware of:

  • Being contacted first about unsolicited financial services or advice
  • Guilt and emotional manipulation being used to pressure you to send someone money or crypto
  • Pressure to share personal information (such as proof of identity or address) over social media
  • Multiple messages with increasing urgency when you do not respond immediately
  • Multiple transactions of varying sizes in a short amount of time - this is designed to confuse you, and make it harder to keep track of what you are paying for and whether you are being paid back in full
  • Being blocked, or the person’s account being deleted, if you start asking questions or threaten to contact the authorities 

A financial professional who is in the position of providing investment advice, or carrying out investment activities on behalf of their clients, should not behave in this way. 

Never share the recovery key for any app or crypto exchange you are using, and never send crypto to an untrusted wallet.

How to protect yourself from scams

  • Don’t click on links in emails from anybody you don’t trust. Also, double-check the sender’s email address to make sure the email is actually coming from whom it says it’s from.
  • Use two-factor authentication wherever available. This will protect your accounts from unauthorised logins even if the scammers have stolen your passwords.
  • Never share your personal information. When you are contacted by someone whether it’s over the phone, by email, or on social media, do not provide them with your Private Key, banking and credit card information, your birthdate, and Social Security/Social Insurance numbers.
  • Do not pay in advance. Usually, scammers promise you gains or tell you that you have won something but you have to pay taxes or fees in advance, most likely they just want to take your money.
  • If you received a very attractive offer but you have doubts, take some time to think it over and talk to someone you trust. If you are pressured to act immediately, as scammers typically try to make you think something is scarce or on a limited time offer, take your time to discuss it with a family member, friend, or financial advisor.

If you are not sure about the offer you’ve received, it is better to contact our support agents to check with them. You can contact us through the SwissBorg Community app or visit our Help Centre to make a request.

Keep your crypto wealth safe in the SwissBorg App

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