Fisher Investments Reviews: Common Scams and How to Protect Yourself

Thankfully, investors can take steps to protect themselves from these nefarious plots. In this article, Fisher Investments reviews common types of scams, how AI technology is aiding scammers and what investors can do to safeguard their retirement savings.

Don’t Be Caught Offguard: An Uptick in Scams in Recent Years

Sadly, more people fall victim to scams every year. In fact, since 2019, the number of annual complaints has nearly doubled according to the FBI, as shown in the blue bars below. Unsurprisingly, the dollar impact has also grown exponentially. During the same time period, total annual losses to reported fraud has nearly quadrupled (red bars in corresponding chart).

This trend is not isolated to the US—one study found that digital fraud attempts increased 80% across the globe from 2019-2022^[iii]—and why it’s imperative investors be on alert and know how to protect themselves and their loved ones

Exhibit 1: Scam Complaints and Losses 2019 – 2023

Source: FBI, Internet Crime Complaint Center. Chart includes yearly and aggregate data for complaints and losses over the years 2019 to 2023. Over this time, there were a total of 3.79 million complaints, reporting a loss of $37.5 billion.

Be On Alert: Common Types of Scams You Should Know

While there are myriad types of scams with varying levels of sophistication, some are more common than others. Below, Fisher Investments reviews three of the most common scams investors and retirees face:

• Advance pay scams: One of the most common scams involves a bad actor asking for payment for a good or service before the investor receives it. The scammer may threaten potential consequences, like being arrested, if the victim does not pay.

  Scammers may call the upfront payment a security deposit, processing fee, bond payment or tax and after receiving it, disappear without delivering or providing further information. Examples include fraudulent investments, lottery winnings, fake sweepstakes, lost inheritance, loans and material goods.

  Cryptocurrency is a popular vehicle to facilitate advance pay scams. Scammers may ask for the upfront payment in cryptocurrency because it is difficult to track and avoids banking safeguards. Since many investors may not know how cryptocurrencies work, scammers like to leverage this unfamiliarity to their advantage. According to the FBI, cryptocurrency fraud losses in the US rose from $2.57 billion in 2022 to $3.96 billion in 2023—an increase of 53%.^[iv]

• Romance scams: These scams use deceptive tactics where unsavory individuals try to develop emotional connections with their victims by posing as potential romantic partners. They might ask for money for travel expenses or basic needs. Seniors living alone may be particularly vulnerable to these types of scams.
• Trusted individual scams: These occur when scammers impersonate someone that victims trust. They may try to gain access to assets by scamming financial institutions or the victim directly. These have become more common with recent advancements in generative AI technology. Generative AI allows scammers to impersonate trusted individuals with technology that clones their likeness. Trusted individual scams can impact anyone, including large businesses.

Be Vigilant: Scammers Are Getting More Advanced

Advancements in AI technology have emboldened many scammers and provided new ways to take advantage of unsuspecting victims. Generative AI technology allows scammers to quickly and easily impersonate legitimate people and businesses. Let’s take a closer look at some of the ways scammers are becoming more advanced:

• Voice cloning: Some scammers use AI to replicate someone's voice by using real audio clips fed through AI software. This enables them to make the person say anything they want. Scammers tend to target high-profile individuals because they may have more audio clips available online. However, anyone with enough recorded audio can have their voice cloned.^[v]
• Deepfake videos: Like voice cloning, scammers may use existing images or videos to create a visual copy of a person, colloquially called a “deepfake.” Scammers may impersonate celebrities or government officials to promote various scams. This isn’t limited to recorded videos; scammers can even use AI to impersonate people on live video calls.
• AI-generated images: Generative AI allows scammers to create images that may be used to enhance their scams. Even more sinister, scammers may use compromising AI-generated images of their victims to extort money.
• AI-generated content: Scammers often use AI to quickly generate written content for fake websites, advertisements, emails, social media posts and more. What used to take hours, even days, now takes minutes. The fake content is often used to entice victims to give up their personal information without knowing it will be used for nefarious purposes.

Don’t Fall Victim: How to Protect Yourself

While scammers are abundant and technology like AI makes scams harder to detect, there are several ways investors can protect themselves. Fisher Investments believes investors should utilize the “3 U’s” to identify potential scams. These criteria are effective, in part, because most scams follow a familiar pattern. The “3 U’s” are:

If you are viewing from a desktop, hover over the icons below to explore each of the “3 U’s.” If you are viewing from a mobile device, click each icon to learn more.

Along with keeping your guard up for potential red flags, good financial habits are critical to protecting yourself against scams. Here are a few steps Fisher Investments believes investors can take to safeguard themselves from wrongdoers:

Click to reveal full tips below.

Fisher Investments believes investors should stay vigilant and perform their due diligence before transacting with any unknown party. While scams today are aplenty and may look more sophisticated, they often still rely upon same patterns laid out in the "3 U's." Investors who look for potential red flags and take precautions to protect themselves are much less likely to fall victim to financial scams.

Want to Dig Deeper?

In this article, we reviewed scams and the rise of AI being used in scams. For more analysis on challenges AI can present when used to scam people, you can read Fisher Investments’ MarketMinder article, “Patience, Skepticism and Caution: Three Timeless Tools to Counter AI Hype and Scams.”

In this episode of Fisher Investments’ Market Insights Podcast, we take a close look at financial scams, who’s most at risk from them and ways to identify potential scams before it’s too late. We also investigate three common types of scams to understand how they work and how to protect against them.