Types of Investment Fraud

Fake Online Brokers

Fraudulent trading platforms mimic legitimate forex, CFD, or stock brokers. They accept deposits, show convincing trading interfaces with fake profits, then block withdrawals — demanding fees or taxes before releasing funds that never existed.

Ponzi Schemes

Fraudsters promise high, consistent returns. Early investors are paid using money from newer investors — not from legitimate investments. Schemes collapse when new investment slows, leaving later investors with nothing. Bernie Madoff ran the most famous Ponzi scheme, defrauding investors of $65 billion.

Pyramid Schemes

Participants are paid primarily for recruiting new members rather than for selling a real product or service. Mathematically unsustainable — the vast majority of participants lose money.

Binary Options Fraud

Fraudulent binary options platforms manipulate trade outcomes, making it impossible to profit. Despite being banned in many jurisdictions, these operations continue under new names from offshore locations.

Advance Fee Fraud

Victims are promised large investment returns but must first pay an "advance fee" — for taxes, legal costs, or account activation. After payment, the scammer disappears or demands more fees.

Crypto Investment Scams

Fake cryptocurrency investment platforms, rug pulls, and pump-and-dump schemes. See our dedicated crypto scam page for full details.

How to Verify an Investment Platform

Before depositing any money with an investment platform, verify:

  • Regulatory registration: Check the FCA register (UK), SEC EDGAR (US), ASIC register (Australia), or your national financial regulator's database
  • Physical address: Verify the company address is real and traceable
  • Domain age: Check whois data — scam platforms are often registered within months of your contact
  • Reviews: Search the platform name + "scam" or "fraud" across Google, Trustpilot, and Reddit
  • Withdrawal policy: Any platform that makes it difficult to withdraw funds is a red flag

⚠️ The "Withdrawal Fee" Test

Legitimate investment platforms never require you to pay a fee, tax, or "insurance charge" in order to access your own funds. If a platform requests any payment before releasing a withdrawal, it is a scam. Do not pay under any circumstances.

How to Report Investment Fraud

United States

  • SEC: sec.gov/tcr (securities and investment fraud)
  • CFTC: cftc.gov/complaint (forex, commodities, crypto)
  • FBI IC3: ic3.gov (internet-based investment fraud)
  • FTC: ReportFraud.ftc.gov (general fraud)
  • FINRA: finra.org/investors/have-problem (broker fraud)

United Kingdom

  • FCA: fca.org.uk/consumers/report-scam
  • Action Fraud: actionfraud.police.uk
  • Financial Ombudsman: financial-ombudsman.org.uk

Australia

  • ASIC: asic.gov.au/report-misconduct
  • ACCC Scamwatch: scamwatch.gov.au

After Reporting — Next Steps

Beyond filing reports with authorities, victims of investment fraud should:

  • Contact their bank immediately to dispute any wire transfers or card payments
  • Preserve all evidence — platform screenshots, communications, transaction records
  • Consult a financial fraud attorney about civil recovery options
  • Engage a licensed private investigator to trace funds and identify operators