Tag Archives: bitcoin

Is this Investment Call a Scam?

You’ve just received a phone call on your mobile (a.k.a. cell) phone. The nice person on the end of the line is lovely, polite, smart and caring. They care deeply about you and they have amazing investment opportunities for their clients.

It’s very rude to assume this nice person is a fraud, thief or scammer. So push that thought right out of you mind. But, a nagging thought made you look things up on the internet, “just in case”.

How can you tell if that call is from a fraud, cheat, thief or scammer? Here are 12 ways to tell that the nice person on the phone is a scammer. Note this is a list of red flags, answering Yes to any one question implies it’s a scam.

  1. Have you heard of the company before?
    If you didn’t and you did not talk someone in the previous 24 hours who mentioned that company name explicitly to you and asked to call you back, it’s a scam.
    It’s that simple, if the call is not from your bank, insurance company or stockbroker and you are not an active trader attending networking events, what makes them think you’re a prospect for their marketing call?
  2. Can you fund your initial position with a credit card?
    Real brokers will not accept credit cards, because the fees are too high and customers can charge back deposits in most jurisdictions.
  3. Can you fund the account with as little as $250 US Dollars?
    Even the largest and cheapest US stock brokers charge about $10 per trade so that represents 4% of your capital. Factor the cost of the call, plus time and infrastructure to make these marketing calls, $10 does not represent a decent return on investment for the call centre. Not all Dealer-Brokers charge brokerage. Forex and CFD charge a spread between buying and selling. The fundamental financial equation does not change, it takes thousands of dollars in fees to justify a broker’s one-on-one time and attention.
  4. Is the caller from outside your national jurisdiction (i.e. overseas)?
    Calling across borders has been the basis of investment scams since the invention of the telephone. If your local Securities Law enforcement organisation can’t touch the dealer-broker, you can’t be protected by them.
  5. Does the caller speak with an accent different from your own?
    If the person calling speaks English, French, Russian or your local language but not with your local accent and you can’t visit their local office today, it’s a scam. I’ve had brokers in Sydney, Australia who had a foreign accept, but I can walk into their offices during business hours. I can’t do that with the broker-dealers who’ve called claiming to be in London, Hong Kong or Tokyo.
  6. Is the caller pitching something you’ve never heard of?
    If you are not a sophisticated investor who regularly reviews private placements, and the call is pitching something you’ve never heard of, it’s a scam. Even if you’ve only heard of it in the news (like “bitcoin”) it’s a scam.
  7. Does the caller mention the words ICO (Initial Coin Offering), Bitcoin, Blockchain, Coin  or crypto? 
    If you’ve never invested in Bitcoin or other crypto-currency and those words come up, it’s a scam. If you want to buy bitcoin (or any of the alt-coins) for the first time, meet someone IRL (in real life( in a public place and exchange cash for the digital currency. People like that exist, they’re not all drug dealers.
  8. Is the phrase “Binary Options” used?
    Seriously Israel has banned Israelis from promoting Binary Options outside of Israel because it is that big a scam. It’s up there with the Nigerian Princes.
  9. Do they offer to remotely log into your computer to set you up on the trading platform?
    If they offer to use Team Viewer (or other remote desktop software)  to help set up your account, it’s a scam. If you can’t set up the trading platform without them taking over your computer you don’t have the IT and security skills to use their trading platform safely. It’s a scam to see how much money you have in your bank account. Normally by this time you’ve already sent them money. Cancel you credit cards and stop talking to them right now.
  10. Is this a cold call?
    If you receive a cold call, it’s a scam. Cold calling is dead in the internet era. Every legitimate marketing move is about attracting warm leads from customers who want to call the supplier. Insurance companies don’t cold call. Credit card companies don’t cold call. Car dealerships don’t cold call. Legitimate investment advisors do not cold call.
  11. Does the caller lack an active LinkedIn account?
    Note the existence of a LinkedIn profile is not any guarantee, if could be fake. Check if their connections are all in the finance game. If so, they’re fake. Brokers are sales people and they love having lots of connections. Thousands to tens-of-thousands of connections. Ask for all their social media accounts. Do a search for the firm name and the results should be a lot of people who work or have previously worked there.
  12. Bonus for the cautious – Is the caller speaking a recognisable language?
    This is a variation on “if their lips are moving, they are lying”.  If you want to invest in a new area, do your research and reach out to someone. Never accept a call from someone you don’t know who wants you to give them your money. Always ask for a recommendation from someone more experienced than you.

No Bitcoin for Sir John Key Former NZ PM

Sir John Key, the former Prime Minister of New Zealand has never invested in Bitcoin. He is not promoting cryptocurrency. If you see it on your news feed or on a website it’s a scam.

Scammers on social media Facebook and Twitter and other sites have set up fake websites to look like the New Zealand Herald. With that photo and a pull quote claiming

I have invested in Bitcoin because I believe in its potential, the capacity it has to transform global payments is very exciting.

~ Never said by John Key 38th Prime Minister of New Zealand but actually said by Richard Branson

Scammers never fully abandon an idea, this will be recycled when the bad publicity dies down.

The article quotes Key as saying he turned a $1000 investment into $300 Million in seven years using a “bitcoin loophole”. Supposedly you can make hundreds of millions of dollars without understanding the market, without effort and without risk.

There’s a hint. Anybody selling you something that uses a “loophole” is a scam, 100% of the time. People who actually discover loopholes (or correlations) keep the secret to themselves while they make money on this arbitrage. When the process stops working efficiently, they sell it to other fools people.

Sir John Key tried to get Facebook to take down ads using the fake image and website. Initially Facebook refused and resisted despite it being an obvious scam. Hopefully six months later and with all the focus on fake news, it looks like the ads are no longer visible on Facebook, but a source who knows Sir John says he is still frustrated and annoyed by these scammers.

The NZ Herald also worked to get the fake site taken down and appears to have succeeded. However the registry information shows the bisimfinance domain is still registered.

Sir John Key made his fortune as a currency trader before entering politics. His net worth is estimated at $65 million NZD.