Asked to take out a loan for an investment? Prevent becoming a potential victim
As cryptocurrency and investment fraud continues to rise, so does the development of the sophisticated tactics used by scammers to extract the maximum funds they can by deceiving individuals. One tactic used to persuade investors to take out bank loans, in order to maximise their investments and profits. This can leave investors in significant debt and has devastating consequences, as they are required to pay these bank loans in full.
Many investment scams begin by gaining the trust of the investors and building their confidence in their investments. This can include a comprehensive onboarding process, constant support from agents throughout and allowing initial withdrawals of their profits.
Once the scammers have built a trusting relationship with the investors, they often encourage them to borrow funds to fund further larger scale investments. Investors reassured by the profits they have received and the success of their investments thus far, then take out loans with a range of providers.
Alternatively, we have received reports of scammers using remote access software to apply for these loans on the investor’s behalf. Be cautious of any unsolicited requests to download remote access software, that grants control and access over your devices.
In order to secure these loans, investors often mislead the loan providers, providing incorrect reasons for the purpose of the loans, such as “home improvements” – this can have significant consequences. Furthermore, as the investors have taken out these loans, the banks will hold them liable and they will be required to repay these in full, plus any interest. This can leave the investors in significant debt which will affect their credit score and it can also cause severe emotional distress.
Even legitimate investments can carry significant risks and these risks are increased by investing borrowed funds. If you are ever advised to borrow to invest or pressured into acting quickly and with urgency, consider this to be a red flag. No legitimate financial companies or advisors should encourage debt-based investing, without full disclosure and transparency as to the risks involved.
If you have been asked to borrow funds to invest:
- Immediately stop all payments to the scam.
- Save all correspondence and documents related to the investment.
- Report the incident to Action Fraud.
If you have fallen victim to a scam or borrowed money to invest – get in touch with us at Wealth Recovery Solicitors for a free consultation. Our friendly and supportive team are hand to assist you in recovering funds lost to this scam.